Patron Client Relations as A Semi Trust Financing Contract on Agency Theory in Marine Fisheries

Abstract

Poverty in fishermen has been one of the major problems in developed country. Limited assets and technologies give impact to the bounding contract between the ship owner and the fishermen which has significant effect to the fishermen's income. The fishermen always live-in poverty whilst the ship owner has much more income than the fishermen. In-depth interviews with Sendang Biru fishermen and ship owner reveal that these contracts are bound up to social system of patron-client. Even though there are few aberrations in the profit-sharing system, these institutions appear to exist and are in agreement so that there is no open conflict. Based on the findings and some of the literature, the design of pure trust financing institutions can be more equitable and favorable alternative financing for both the ship owner as principals and the fishermen as agents. To minimize the possibility of moral hazard and adverse selection on these contracts, it is advisable to monitor each ship which are return and the sale of fish. The ship owner not only monitor it, but also could place one of their trustees' employments beside the fishermen whose go to sail.