8 February 2019: The Food and Agriculture Organization of the UN (FAO) has released a technical paper that aims to support improved understanding and measurement of aquaculture and fisheries’ contribution to gross domestic product (GDP). SDG 14 (life below water) includes an indicator that intends to measure the value of sustainable fisheries.
SDG indicator 14.7.1 focuses on sustainable fisheries as a percentage of GDP in small island developing States (SIDS), Least Developed Countries (LDCs) and all countries. The UN Inter-Agency and Expert Group on the SDG Indicators (IAEG-SDGs) has classified indicator 14.7.1 as a Tier III indicator, meaning that it requires methodological development. The FAO publication therefore aims to contribute to improving the methodology for understanding and measuring indicator 14.7.1.
The publication titled, ‘Understanding and Measuring the Contribution of Aquaculture and Fisheries to GDP,’ explains that there is a general lack of consensus on how to measure an industry’s or sector’s contribution to GDP, including on how to measure the contribution of aquaculture and fisheries to GDP. One of the challenges in measuring the sector’s contribution to GDP is measuring both the demand and supply-side factors.
Measuring both the demand and supply-side factors of aquaculture and fisheries’ contribution to GDP is a challenge.
To develop an improved methodology, the paper uses input-output models to formulate and clarify a set of measures of the contribution of aquaculture and fisheries to GDP. The input-output model includes six key industries on the fish value chain: aquaculture; fishing; manufacture of aquafeed; building of fishing boats; fish processing; and fish marketing, including transporters, storage services, wholesalers, retailers, etc. The paper explores multiple steps in estimation including: a gross value added (GVA)-final use matrix to understand GDP contribution at the industrial level from both demand and supply perspectives; an output decomposition table; estimation of a set of GDP measures at different levels; measurement of the percentage of aquaculture and fisheries’ contribution to GDP; GVA ratio; and GVA multiplier.
The paper describes specific examples that suggest that an industry’s/sector’s GVA, “when used alone, could be a misleading indicator for evaluating its economic performance over time” that may not adequately capture the sector’s overall economic contribution and may need to be supplemented with measures of indirect contribution to GDP. The paper then considers both the impact and contribution perspectives, using a decomposition method but concludes it is difficult to apply empirically.
In data-poor environments, the publication observes, input-output tables may not be readily available. In other situations, such tables may group aquaculture and fisheries under the agriculture, forestry, hunting and fishing sectors, making it difficult to derive distinct values for the aquaculture and fisheries sector. In such situations, the report recommends a “satellite account approach”: measuring the contribution of aquaculture and fisheries to GDP through measuring the GVA of an extended aquaculture and fisheries sector measurement composed of key industries on the fish value chain. This approach has been used in both Africa and China. Value chain approaches can also be used to measure aquaculture and fisheries’ contribution to GDP.
The paper reflects on the percentage of GDP as a policy target within the 2030 Agenda for Sustainable Development. The paper suggests that countries use such measures as benchmarks to guide policy and planning, arguing that sector champions “do not need to be disappointed with a small percentage of GDP for aquaculture and fisheries” but can instead use the gap between a benchmark percentage and their current percentage to justify or ask for more support to the sector.
In conclusion, the paper finds that “many practical issues” remain to be resolved to properly and effectively measure GDP in a way that supports evidence-based policy and planning for sustainable aquaculture and fisheries’ development at global, regional and national levels. Still, the paper underscores the importance of understanding supply and demand-side factors and of continued efforts to further advance methodologies to measure SDG indicator 14.7.1, including further studies on how to adapt measures to different data environments and case studies and consultations to adapt guidelines to different policy and planning environments, and then synthesize them into internationally established methodology and standards. [Publication: Understanding and Measuring the Contribution of Aquaculture and Fisheries to GDP] [FAO Publication Landing Page] [SDG Knowledge Hub Story on IAEG-SDGs’ Indicator Classification]