Payments to fishermen can be disbursed in two weeks following purchasing rate revision

Fisheries Minister Ahmed Shiyam states payments to fishermen for fish purchased from them can only be disbursed within two weeks following changes announced by Maldives Fisheries Company Limited (MIFCO) to the fish purchasing rate on Sunday, to reflect prices at the international market.

Speaking at a press conference on Monday, Minister Shiyam said the government is unable to fulfill its pledge to disburse payments for fishermen in 48 hours in light of the financial state of the government and MIFCO. He added that payment can only be disbursed to fishermen within 48 hours if the state fisheries company had a cash flow.

Addressing the changes made fish purchasing rate on Sunday, the Minister said the purpose of the revision was to pave way to purchase fish from fishermen in a sustainable manner amid the decline in state finances.

“Quick and significant reforms are required if fish is purchased at a rate of MVR 20 or at a rate that is now below MVR 20. Due to the fact that these reforms cannot be immediately implemented and the fact that the government is battling financial constraints, a huge expense will be incurred if MIFCO purchases fish at a rate of MVR 20,” he said.

In this regard, he detailed that the government would need to allocate MVR 560 million in subsidies to MIFCO annually to purchase fish at a rate of MVR 20.

“MVR 560 million is a difficult amount considering the state’s revenue and expenses that include matters such as loan repayments,” he added.

During his presidential campaign, President Dr. Mohamed Muizzu pledged that his administration would not lower the fish purchasing rate below MVR 20.

MIFCO in a statement on Sunday, said purchasing fish from local fishers without referring to market rates, was not financially sustainable for the company's fish processing and export activities.

Subsequently, the company has decided to shift to fluctuating prices based on market rates, it said is aimed towards achieving a permanent solution, and said the changes will be effective from Monday, July 1^st onward.

The purchase rates of MIFCO will be based on present market rates and export costs, with the prices reviewed on a weekly basis.

On September 16, 2023, the MDP administration – which went on to lose re-election later that month - raised the fish purchase rate from MVR 17 to MVR 25.

But the current administration lowered the rate to MVR 20, citing MIFCO was purchasing fish at a huge loss, and that it was what had created the backlog in outstanding payments, in the first place.

The 20 Rufiyaa rate is still a loss for MIFCO.