The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Bahamian sponge exports slumped in value by almost 50 per cent in the five years to 2011, as low incomes and an inability to access higher-value processing encouraged many to leave the sector.

A report by the Inter-American Development Bank’s Multilateral Investment Fund (MIF) pinpointed the lack of high-end processing skills, and the failure to “sustainably manage the Bahamas’ natural capital”, as key reasons for the sector’s slow decline to near-irrelevance.

The report, part of a $1.2 million project to revive the Bahamian sponging sector, said stable prices and the product’s use in cosmetic and pharmaceutical products offered the potential for industry players to increase their prices by up to 33 per cent.

It also expressed hope that the industry’s revival would reverse the deep poverty on, and increasing population migration from, the Bahamas’ main sponging island of Andros.

The MIF report said Andros’s poverty rate stood at 17 per cent, compared to 13 per cent for New Providence, with 53 per cent of the island’s households currently surviving on less than $20,000 per year.

The lack of economic opportunity, the MIF report added, had forced almost one out of every 10 Androsians to leave the island in search of work elsewhere in the decade to 2010.

Detailing the decline of a once-vital indigenous Bahamian industry, the MIF report said: “In 2011, the value of sponges exported from the Bahamas equalled $540,000 (61,500 pounds), while as recently as 2006, sponge exports totalled $1.065 million (111,500 pounds).

“The significant decline (49.3 per cent) was due in part to discouraged spongers, who realised the disparity between the return on investment (ROI) by exporters compared to the spongers. Spongers therefore withheld their labour and resorted to other, more lucrative fishing options.”

The MIF report, obtained by Tribune Business, said Bahamians lacked the processing and marketing skills, plus organisation, to access the market’s high-end.

This, in turn, limited locals to low incomes and forced them to use ‘foreign middlemen’ to process raw Bahamian products and find international buyers. In other words, the revenues and profits from an indigenous Bahamian product are largely going to foreigners - not locals.

“Local sponge harvesters (spongers) do not have access to higher-value markets because they are not organised and do not have the skills to process and market the sponges, and thus earn a low-income,” the MIF report said.

“They harvest sponges and sell them at a low price to an export business that processes them and sells them internationally at a much higher price.

“Since the spongers are neither involved in the processing nor are linked to an international buyer, they do not benefit from the higher end-price of the sponges. They also are not trained in sustainable harvesting practices which could help ensure their incomes into the future.”

The report, though, said price stability and increasing global demand for sponge products across a variety of industries were helping to create an environment conducive to turning around the Bahamian sponge industry.

“The usage of sponges is increasing, and sponges are now used in cosmetic, medical, pharmaceutical and chemical products,” the MIF report said.

“Given that the price per pound was comparable between these [five] years [2006-2011], this indicates that there is opportunity to increase the supply of sponges for export for those willing to harvest and process them sustainably.”

The report added that it was vital for Bahamians to transition from manual to automatic sponge processing to “meet international standards, reduce labour costs and improve productivity”.

With the Bahamas Agricultural and Industrial Corporation (BAIC) and the Bahamas Commercial Spongers Association (BSCA) willing to finance the equipment needed to achieve this, the MIF added: “With the right training and organisation, local spongers can move up the value chain and capture a portion of this income.

“The majority of sponging in the Bahamas occurs on the island of Andros..... However, its poverty rate is 17 per cent, compared to 13 per cent and 10 per cent for New Providence (Nassau) and Grand Bahama respectively.

“As a result of a lack of economic opportunities on the island, nearly 10 per cent of the population migrated out of Andros between 2000 and 2010, adding to the country’s urbanisation.”

Successive governments have been desperate to address the population migration to an already-overcrowded Nassau, and all the socio-economic problems this creates.

“The project expects to have 200 direct beneficiaries who are spongers in Andros, and 400 indirect beneficiaries, who are the spongers’ families,” the MIF report said.

“Beneficiaries include individuals from the underserved rural communities engaged in sponging. The major sponging villages in Andros are Mangrove Cay, Red Bay and Lowe Sound.

“The island of Andros has approximately 7,500 inhabitants and the average household size is 3.2. Approximately 53 per cent of households have an income less than $20,000 per year. “

The report added that 10 per cent of full-time spongers in Andros were women and, given that it was “a physically demanding activity”, and if processing could be returned to the Bahamas it would boost their participation.

“Currently, sponges in Andros are not farmed,” the MIF report said. “However, farming sponges would enable spongers to cultivate the sponge varieties that are in demand and would ensure sustainability of the sponge population and industry, should the need arise.

“Presently, there are approximately three sponge experts who know how to farm sponge using traditional methods. We would wish to expand this and preserve this knowledge through education and training.”