El Niño – billion-dollar losses in Peru’s fishing industry

El Niño

The year 2023 brought another awakening of the weather phenomenon known as El Niño. Meteorologists predict that its devastating impact will last until 2024. According to forecasts, South America will particularly experience its negative economic and social effects. In Peru, billions of dollars are expected to be lost in the fishing industry, a sector particularly vulnerable to the El Niño phenomenon. They will also echo in other parts of the world.

A brief history of El Niño

As early as the 16th century. Conquistadors arriving in South America from Europe noted the strange phenomenon of periodically favorable winds along the coast and the presence of moist air in normally desert areas. According to historians, it was El Niño that made Pizarro’s third expedition so successful, to the detriment of the Incas of course.

Over the centuries, the puzzling phenomenon has been observed repeatedly, always every 2-7 years. Its modern name began to be used by Peruvian fishermen, who noted a strange warming of the ocean water and air around Christmas (El Niño is Spanish for baby Jesus). Today’s meteorologists explain that the inhibition of the trade winds blowing from the eastern Pacific is reducing upwelling, the rising of oxygen-, nitrogen- and phosphorus-rich cold deep waters to the surface. As a result, there is an excess of warm water on the west coast of South America, poor in nutrients and unfavorable for local fish species.

Perennial losses in Peru’s fishing industry

The longer El Niño lasts, the greater the damage to the marine ecosystem. The change in water temperature affects the development of plankton, the size of fish populations and, consequently, fishing profits. This is an issue in Peru, as fishing is one of the most important industries, and local fisheries are considered the richest in the world. Peruvian anchovies, mackerel and sardines are particularly caught in the waters off the west coast of South America. Anchovies are the world’s most commercially viable fish, with between 6 and 11 million tons caught annually in Peru and Chile. According to an FAO report, losses in the fishing industry due to El Niño are as high as 0.9 million tons in individual seasons.

The El Niño of 1972-1973 so effectively decimated Peru’s anchovy population that millions of the seabirds that feed on them died, and Peru’s entire economy was in crisis. One of the most severe El Niño events occurred between 1997 and 1998, and globally caused economic losses estimated at $5.7 trillion. – As a result, Peru’s economic development fell by 6.2 percent.

El Niño 2023 – extremely drastic

El Niño cycles are not directly related to climate change. However, global warming is exacerbating their effects, causing countries like Peru to fall deeper and deeper into economic crisis. This year’s winter in the southern hemisphere has been unusually warm, with heavy rains and floods that have claimed many human lives. In the Andes, this season has been particularly difficult – the Amazon, whose source is in Peru, has experienced an exceptional drought, while in the coastal zone, heavy rains and flooding have occurred in the shadow of the mountains.

The region has minimal chance of successfully adapting to such extreme conditions. The Reuters news agency predicted back in March that the Peruvian government would need to spend more than $1 billion this year. to combat the consequences of climate change and El Niño. This is a huge sum, considering that Peru’s GDP is $242 billion. Losses in the fishing industry are already evident, and will increase over time. In June 2023. Peru’s Ministry of Production canceled this year’s first anchovy fishing season due to El Niño – as there were not enough adults in coastal waters. The second season opened in October with a limit of 1.6 million metric tons, up 26 percent. lower compared to the previous year.

The government sets such low catch limits to prevent the fisheries from being completely depleted. However, this translates into much lower profits for fishermen. For the first time in 30 years, some fishmeal factories, one of Peru’s main export products, have closed. According to the International Marine Ingredients Organization (IFFO), in the first eight months of 2023, production of meal declined 28 percent, while fish oil declined 24 percent from the previous year. And with Peru accounting for as much as 20 percent of global fishmeal production, its price has risen significantly, which in turn has affected profits for animal feed producers and aquaculture in various parts of the world.

Not just fishing – social costs

Colombia, Ecuador, Peru and Bolivia painfully experience the consequences of El Niño every few years – from the coast to the deserts and peaks of the Andes. In total, up to 110 million people are subject to the devastating impact of heat waves, drought, but also heavy rainfall. The entire Andean region is particularly vulnerable to climate change – both phenomena, though independent of each other, are putting local economies in serious crisis. After all, colossal losses in the fishing industry are not the only problem. Many farmers and fishermen are beginning to flee to the cities, suspending operations. These migrations are creating tensions in the areas of employment, health care and the housing situation. Even before the onset of El Niño, between January and March this year, torrential rains rendered homesless more than 123 thousand. people, leaving behind 99 deaths.

The severe drought limits access to drinking water and facilitates the development of infectious diseases. Children in particular are suffering, most of whom cannot even make it to school. Increased temperatures and humidity encourage mosquito breeding, which in turn intensifies outbreaks of dengue fever – case statistics are now at their highest since the 2017 epidemic, and the disease has already claimed at least 448 lives. Huge losses also await farmers. There is already talk of a serious crop failure in Peruvian blueberries, which are exported almost all over the world. The entire vegetable and fruit sector, according to representatives of the Association of Peruvian Agricultural Producers (AGAP), is expected to experience a drop in income of at least 5 percent.

Financial assistance for Peru

The drastic impact of El Niño and climate change on Peru’s economy was discussed at this year’s COP28 summit, held in Dubai from November 30 to December 12. A loss and damage fund has been set up for just such situations, which so far accounts for $420 million.

According to experts, the Andes region faces even greater disasters in the future due to the combined impact of global warming and the devastating activities of El Niño. Preparing for the crisis is therefore indicated as a priority. Fixing its effects will be the next step. According to David Sislen, World Bank representative for Latin America and the Caribbean, $1. invested in risk mitigation means a savings of $4. In the context of economic losses. In line with this strategy, the World Bank granted Peru in October 2023. loans of $750 million for economic renewal and adaptation measures.

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