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FISHERIES WITHOUT SUBSIDIES

This presentation discusses the concept of fisheries without subsidies and its implications for profitability and sustainability. It explores various types of subsidies and their effects on the fishing industry. The presentation also examines the challenges and opportunities of transitioning to a market-driven agrifood system in fisheries.

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FISHERIES WITHOUT SUBSIDIES

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  1. FISHERIES WITHOUT SUBSIDIES Craig K. Harris Department of Sociology Food Safety Policy Center Michigan State University

  2. Presentation at the International Sociology Association (ISA) Research Committee 40 (RC-40) on the Sociology of Agriculture Miniconference on “An Agriculture Without Subsidies? -- Visioning the Challenges of a Market Driven Agrifood System” at Keszthely, Hungary, 21 August 2005

  3. WHAT ARE SUBSIDIES? • Government policy or program that maintains or increases the profitability of an economic sector • Public • Profitability in context of current economic structure • Free market capitalism • Economic sector will usually be industrially defined, but may be geographic • Can the target of the subsidy be the whole economy? • Industry may be entire sector, or horizontal segment, or vertical segment

  4. WHAT ARE SUBSIDIES? • Government policy or program that maintains or increases the profitability of an industry • Subsidies operate in one of three ways . . . • Government policy or program that alters the costs of production, by altering the cost of any factor of production

  5. WHAT ARE SUBSIDIES? • Government policy or program that alters the costs of any factor of production • Supply factor of production at no charge as public good • Development of new technology • Enable industry to comply with (new) environmental regulations • Public efforts of discovery and location • Development and enforcement of national and international regulations

  6. WHAT ARE SUBSIDIES? • Government policy or program that alters the costs of any factor of production • Supply factor of production at no charge as public good • Reduced import duty on factor of production

  7. WHAT ARE SUBSIDIES? • Government policy or program that alters the costs of any factor of production • Supply factor of production at no charge as public good • Reduced import duty on factor of production • Increased import quota for factor of production

  8. WHAT ARE SUBSIDIES? • Government policy or program that alters the costs of any factor of production • Supply factor of production at no charge as public good • Reduced import duty on factor of production • Increased import quota for factor of production • Reduced taxes on real property related to production

  9. WHAT ARE SUBSIDIES? • Government policy or program that alters the costs of any factor of production • Supply factor of production at no charge as public good • Reduced import duty on factor of production • Increased import quota for factor of production • Reduced taxes on real property related to production • Reduced excise taxes on factors of production

  10. WHAT ARE SUBSIDIES? • Government policy or program that alters the costs of any factor of production • Supply factor of production at no charge as public good • Reduced import duty on factor of production • Increased import quota for factor of production • Reduced taxes on real property related to production • Reduced excise taxes on factors of production • Reduced income tax

  11. WHAT ARE SUBSIDIES? • Government policy or program that alters the costs of any factor of production • Supply factor of production at no charge as public good • Reduced import duty on factor of production • Increased import quota for factor of production • Reduced taxes on real property related to production • Reduced excise taxes on factors of production • Reduced income tax • Reduced cost of industry organization

  12. WHAT ARE SUBSIDIES? • Government policy or program that alters the costs of any factor of production • Supply factor of production at no charge as public good • Reduced import duty on factor of production • Increased import quota for factor of production • Reduced taxes on real property related to production • Reduced excise taxes on factors of production • Reduced income tax • Reduced cost of industry organization • Allowing non-competitive forms of organization for purchasing inputs

  13. WHAT ARE SUBSIDIES? • Government policy or program that alters the costs of any factor of production • Supply factor of production at no charge as public good • Reduced import duty on factor of production • Increased import quota for factor of production • Reduced taxes on real property related to production • Reduced excise taxes on factors of production • Reduced income tax • Reduced cost of industry organization • Allowing non-competitive forms of organization for purchasing inputs • Government guarantee of loans for equipment or operations

  14. WHAT ARE SUBSIDIES? • Government policy or program that maintains or increases the profitability of an industry • Subsidies operate in one of three ways . . . • Government policy or program that alters the costs of production, by altering the cost of any factor of production • Government policy or program that alters the price received for a good or service

  15. WHAT ARE SUBSIDIES? • Government policy or program that alters the price received for a good or service • Controling/influencing the supply of the good or service itself affects the price that can be obtained • Domestic quotas • Import quotas

  16. WHAT ARE SUBSIDIES? • Government policy or program that alters the price received for a good or service • Controls on the supply of the good or service itself • Availability of competing goods/services influences the price that can be obtained • Domestic quotas • Import quotas • Standards of identity • Public efforts of discovery

  17. WHAT ARE SUBSIDIES? • Government policy or program that alters the price received for a good or service • Supply of the good or service itself • Availability of competing goods/services influences the price that can be obtained • Price of competing goods/services influences the price that can be obtained • Tariffs on imported goods • Lack of subsidies for competing goods/services • Negative standards of identity

  18. WHAT ARE SUBSIDIES? • Government policy or program that alters the price received for a good or service • Supply of the good or service itself • Availability of competing goods/services influences the price that can be obtained • Price of competing goods/services influences the price that can be obtained • Payments in addition to sales . . . • Can increase net income directly • Can lower the selling price and thus increase the quantity sold and thus increase net income • Price supports, loan deficiency payments

  19. WHAT ARE SUBSIDIES? • Government policy or program that alters the price received for a good or service • Supply of the good or service itself • Availability of competing goods/services influences the price that can be obtained • Price of competing goods/services influences the price that can be obtained • Payments in addition to sales • Identification and publication of novel positive attributes • Health

  20. WHAT ARE SUBSIDIES? • Government policy or program that alters the price received for a good or service • Supply of the good or service itself • Availability of competing goods/services influences the price that can be obtained • Price of competing goods/services influences the price that can be obtained • Payments in addition to sales • Identification and publication of novel positive attributes • Allowing non-competitive forms of organization for marketing and distribution

  21. WHAT ARE SUBSIDIES? • Government policy or program that maintains or increases the profitability of an industry • Subsidies operate in one of three ways . . . • Government policy or program that alters the costs of production, by altering the cost of any factor of production • Government policy or program that alters the price received for a good or service • Government policy or program that maintains the ecological sustainability of the industry

  22. WHAT ARE SUBSIDIES? • Government policy or program that maintains the ecological sustainability of the industry • Maintain the ecological conditions of production and reproduction of the industry

  23. WHAT ARE SUBSIDIES? • Government policy or program that maintains the ecological sustainability of the industry • Maintain the ecological conditions of production and reproduction of the industry • Maintain the ecological sustainability of the aquatic ecosystem

  24. WHAT IS THE PURPOSE OR FUNCTION OF SUBSIDIES? • Purpose or function for whom? • Coincidence of interests

  25. WHAT IS THE PURPOSE OR FUNCTION OF SUBSIDIES? • National security

  26. WHAT IS THE PURPOSE OR FUNCTION OF SUBSIDIES? • National security • Perpetuation of capitalism

  27. WHAT IS THE PURPOSE OR FUNCTION OF SUBSIDIES? • National security • Perpetuation of capitalism • Foster/facilitate accumulation of wealth by particular sectors/firms • Create source, and ensure supply, of inexpensive imported seafood for processing

  28. WHAT IS THE PURPOSE OR FUNCTION OF SUBSIDIES? • National security • Perpetuation of capitalism • Foster/facilitate accumulation of wealth by particular sectors/firms • Legitimation • Buffer sectors against excessive harms of capitalist competition • Create source, and ensure supply, of inexpensive imported fish for consumption

  29. WHAT IS THE PURPOSE OR FUNCTION OF SUBSIDIES? • National security • Perpetuation of capitalism • Foster/facilitate accumulation of wealth by particular sectors/firms • Legitimation • Keep land in farming • Environmental benefit of open space (as opposed to urban development)

  30. WHAT IS THE PURPOSE OR FUNCTION OF SUBSIDIES? • National security • Perpetuation of capitalism • Foster/facilitate accumulation of wealth by particular sectors/firms • Legitimation • Keep land in farming • Keep families in rural areas • Maintain rural communities • Agrarianism

  31. WHAT IS THE PURPOSE OR FUNCTION OF SUBSIDIES? • National security • Perpetuation of capitalism • Foster/facilitate accumulation of wealth by particular sectors/firms • Legitimation • Keep land in farming • Keep families in rural areas • Environmental sustainability • Fishery itself • Aquatic ecosystem in total

  32. ISSUES WITH SUBSIDIES • Domestic issues

  33. ISSUES WITH SUBSIDIES • Domestic issues • Distortion of development • Create “excess capacity” that leads to harvesting more than environmentally sustainable yield, and thus to depletion of fish stocks

  34. ISSUES WITH SUBSIDIES • Domestic issues • Distortion of development • Inequity between sectors

  35. ISSUES WITH SUBSIDIES • Domestic issues • Distortion of development • Inequity between sectors • Inequity within sectors • Between units with differential access in the same segment • Between vertical segments

  36. ISSUES WITH SUBSIDIES • Domestic issues • Distortion of development • Inequity between sectors • Inequity within sectors • Burden and constraint on national budget

  37. ISSUES WITH SUBSIDIES • Domestic issues • Distortion of development • Inequity between sectors • Inequity within sectors • Burden and constraint on national budget • Relevance to national security • Function as a “reserve navy”

  38. ISSUES WITH SUBSIDIES • Domestic issues • Distortion of development • Inequity between sectors • Inequity within sectors • Burden and constraint on national budget • Relevance to national security • Use of policy in one sector to accomplish other purposes

  39. ISSUES WITH SUBSIDIES • Domestic issues • Distortion of development • Inequity between sectors • Inequity within sectors • Burden and constraint on national budget • Relevance to national security • Use of policy in one sector to accomplish other purposes • Nostalgia for lost “Golden Age”

  40. ISSUES WITH SUBSIDIES • Domestic issues • International issues • Impede development of raw commodities sectors in developing countries because cannot compete on world market

  41. ISSUES WITH SUBSIDIES • Domestic issues • International issues • Impede development of raw commodities sectors in developing countries because cannot compete on world market • Impede development of food processing sectors in developing countries because can import processed foods more cheaply than producing them locally

  42. ISSUES WITH SUBSIDIES • Domestic issues • International issues • Impede development of raw commodities sectors in developing countries because cannot compete on world market • Impede development of food processing sectors in developing countries because can import processed foods more cheaply than producing them locally • Equity – level playing field in international economics

  43. ISSUES WITH SUBSIDIES • Domestic issues • International issues • Impede development of raw commodities sectors in developing countries because cannot compete on world market • Impede development of food processing sectors in developing countries because can import processed foods more cheaply than producing them locally • Equity – level playing field in international economics • Transparency - duplicity within development establishment

  44. ISSUES WITH SUBSIDIES • Domestic issues • International issues • Impede development of raw commodities sectors in developing countries because cannot compete on world market • Impede development of food processing sectors in developing countries because can import processed foods more cheaply than producing them locally • Equity – level playing field in international economics • Transparency - duplicity within development establishment • Subsidies facilitate dumping – selling at a price that is less than the cost of production

  45. WHY DO SUBSIDIES PERSIST? • Subsidies are able to mobilize and attract uniquely powerful coalitions of political support that transcend party lines and political ideologies

  46. TECHNOSCIENCE NETS BOATS ENGINES FRESH / FROZEN FOOD SERVICE INSTITUTIONS ESTABLISHMENTS CAPTURE FISHERIES INANIMATE ENERGY PROCESSORS CONSUMERS EATERS LABOR RETAIL STORES SEAFOOD FARMING MANUFACTURERS LAND CITIZENS GOVERNANCE SEAFOOD COMMODITY SYSTEM

  47. WHAT KINDS OF SUBSIDIES DO FISHERIES CURRENTLY RECEIVE? • Supply factor of production at no charge as public good • Access to public trust (public property) resources at no charge or only minimal charge • Most capture fisheries have access to national seafood stocks at no charge, or only a minimal permit fee • Some nations provide coastal land for aquaculture ponds at no charge • Some communities provide land for docks, wharves, stages, sheds, and drying racks

  48. WHAT KINDS OF SUBSIDIES DO FISHERIES CURRENTLY RECEIVE? • Supply factor of production at no charge as public good • Maintain and enhance availability of seafood species • Some nations support fish hatchery programs to maintain/enhance stocks of commercially harvested fish • Some nations support fish hatchery programs to provide seed for aquaculture

  49. WHAT KINDS OF SUBSIDIES DO FISHERIES CURRENTLY RECEIVE? • Supply factor of production at no charge as public good • Public infrastructure for common wellbeing • Many countries provide devices and infrastructure to assist safe navigation (e.g., lighthouses, marker buoys, charts) • Some nations provide safe, accessible harbors

  50. WHAT KINDS OF SUBSIDIES DO FISHERIES CURRENTLY RECEIVE? • Supply factor of production at no charge as public good • Development of new technology • Hull design for fishing boats • Transgenic species of fish for aquaculture • Research on optimal pond and pen management

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