The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Bahamian spongers will enjoy an average annual sales growth of 17 per cent by the time a three-year project to revitalise the industry concludes, an Inter-American Development Bank (IDB) report has revealed.

Its $1.118 million project to revitalise one of the Bahamas’ most traditional industries, and enable this nation to benefit economically from its natural resources, is designed to benefit 660 persons on Andros - an island where more than half the households live on under $20,000 per year.

A project memorandum, obtained by Tribune Business, reveals that Bahamian spongers will be directed towards more sustainable harvesting practices, a move that will benefit 1.4 million hectares of sea floor.

A Bahamas Commercial Sponge Association (BCSA) will be formed to assist industry participants in getting their product to market and obtaining higher margins, with the goal of increasing prices by 40 per cent.

The IDB memorandum reveals that between 200-250 Andros-based sponge fishermen will adopt new harvesting and business practices if the project hits its objectives.

And, in opening new export markets for their products, the IDB is hoping that sales to foreign countries and domestically will reach $200,000 and $175,000, respectively, when the three-year project is completed.

“Nature provides income and employment for 80 per cent of the inhabitants of Andros,” the IDB memorandum said.

“Approximately 1,645 full time jobs and 8,000 part-time jobs rely on the island’s natural capital. Environmental degradation in the Caribbean means that available natural resources on Andros are likely to become more valuable, if they are properly protected.

“Conversely, the potential losses in values, and the loss in income, jobs and welfare, could be enormous if effective conservation actions are not implemented.”

Describing sponges as “a key form of natural capital in the Bahamas”, the IDB memorandum added that they were “an important source of income for low-income populations who harvest and sell them”.

“The project expects to have 200 direct beneficiaries who are spongers in Andros, and 440 indirect beneficiaries, who are the spongers’ families,” the IDB said.

“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 of less than US$20,000 per year.

“Sponging is a physically demanding activity and, according to the BCSA, approximately 10 per cent of full-time spongers in Andros are women. It is expected that women could participate in processing the sponges when mechanised sponge processing occurs lower in the value chain,” the bank added.

“Geographically, beneficiaries include individuals from the underserved rural communities engaged in sponging. The major sponging villages in Andros are Mangrove Cay and Red Bays.”

The IDB memorandum says the project is intended to drive Bahamian spongers up the industry’s ‘value chain’ by enabling them to process their product in the Bahamas.

The BCSA, which will be formed to act as the industry’s representative body, will be given resources “to purchase and install processing equipment” in Mangrove Cay and Red Bays.

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

“In 2011, the value of sponges exported from the Bahamas equalled $540,000 (61,500 pounds). This represents a decline from 2006, when sponge exports totalled $1.065 million (111,500 pounds).

“The per-unit price in 2006 and 2011 was similar. The significant decline in total value of production was due in part to discouraged spongers, who realised the disparity between their income and the return on investment (ROI) of the sponge exporters, and therefore resorted to other income-generating activities. It is expected that 2011 levels of production can be reached again through project activities.”

The IDB said Bahamian spongers were “not capturing the full value of their product” due to a fragmented and disorganised supply chain, plus the absence of processing and marketing functions to enable them to “access higher-value markets”.

“In the existing supply chain model, spongers harvest sponges and sell them at a low price to a consolidator/export business that processes them and sells them at a much higher price,” the IDB memorandum said.

“Since the spongers are neither involved in processing nor are linked to a final customer buyer, they do not benefit from the higher end-price of the sponges...... These value chain issues are the second problem facing the industry.”

Looking to the benefits that will flow from addressing this issue, the IDB paper said: “It is expected that through the project, spongers who work with the BCSA will increase their sales price from $.60 to $1 per sponge, an increase of 40 per cent.

“In addition, to maintain sales volumes, using research on the most profitable types of sponges, the project will train spongers on how to farm, harvest and process them properly and sustainably.”

Looking at the sponging industry’s tradition in the Bahamas, the IDB added: “Until 1938, the Bahamas’ sponge grounds were the most productive in the world, with peak production reached in 1917, when 164,000 pounds of sponges were exported in one year.

“While the industry has shrunk considerably due to a fragmented value chain, population collapse and antiquated processes, sponges still serve as an important source of income for low-income populations who harvest and sell them, and could once again be a principal driver of income and development for the country.”