Fisheries Subsidies: Magnitude and Impacts

1. Fisheries Subsidies: Magnitude and Impacts Rashid Sumaila Fisheries Economics Research Unit UBC Fisheries Centre Co-authors: Khan, Teh, Watson, Tyedmers, Munro, Pauly r.sumaila@fisheries.ubc.ca Presentation at the WTO, May 24, 2007

2. Should we be concerned about the current state of global fisheries? “The Earth and the fullness of it belongs to every generation, and the preceding one can have no right to blind it up from posterity” (Adam Smith, 1766 Lecture on Jurisprudence). Photo: NASA

3. Why the current poor state of fisheries? • Open access; • Subsidies; • Trade under ineffective management; • IUU fishing; • Incomplete valuation.

4. Why the concern about subsidies? • Substantial opportunity cost; • Socio-economic, distributional and trade impacts; • Contributing to overfishing.

5. TC1 Cost-reducing subsidies BE1 TC2 TR & TC ($) BE2 MSY Bionomic equilibrium (BE) Total cost of fishing effort (TC) MEY TR & TC ( $) TR Max. rent E3 E4 Fishing effort (E) Total Revenue (TR) E1 E2 E3 Fishing effort (E) How subsidies induce overfishing Adapted from Gordon (1954)

6. Fishing Intensity 1900 1999 Subsidies contributing to overfishing • Overcapacity and overfishing • Overcapitalization and subsidies Biomass Biomass t·km-2 1.8-2.51.5-1.81.2-1.50.9-1.20.7-0.90.6-0.70.4-0.60.3-0.40.2-0.30.1-0.20-0.10-0 Courtesy V. Christensen

7. Research questions on subsidies • What are the types and categories? • What are the amounts provided? • What proportion contribute to overcapacity?

8. Identifying & categorizing subsidies • FAO (2002, 2004) guidelines; • Milazzo (1998); • OECD publications; • Potential impact on fish stocks.

9. Identifying & categorizing subsidies The Good, the Bad, and the Ugly

10. Estimating subsidies • Created a database of 12 subsidy types for 144 maritime countries for 1995 to 2005; • Information was filtered into 3 groups: • Group 1: Monetary value of subsidy available; • Group 2: No subsidy amount reported but it is known that subsidies are provided; • Group 3: Either no information, or where we know that no subsidies were provided.

11. Filling the gaps in data • Countries divided into two categories – developed and developing; • Obtain a ratio of subsidies to countries’ landed value for all subsidy types; • Obtain developed & developing country means of this ratio for each subsidy type; • Use weighted averages to fill the gaps; • Sum subsidies for all countries to obtain global estimate.

12. The results

13. Total global subsidies

14. Comparing estimates

15. Subsidies by category

16. Subsidies by geographical region

17. Subsidy intensity by landed value

18. Summary • Global fisheries subsidies were estimated at about USD 32 billion (ranging from 30 to 34 USD billion).

19. Summary • Global fisheries subsidies were estimated at about USD 32 billion (ranging from 30 to 34 USD billion). • Bad subsidies was the highest category estimated at about 70% of global total;

20. Summary • Global fisheries subsidies were estimated at about USD 32 billion (ranging from 30 to 34 USD billion). • Bad subsidies was the highest category estimated at about 70% of global total; • Fishing port construction/renovation subsidies estimated at USD 8.0 billion;

21. Summary • Global fisheries subsidies were estimated at about USD 32 billion (ranging from 30 to 34 USD billion). • Bad subsidies was the highest category estimated at about 70% of global total; • Fishing port construction/renovation subsidies estimated at USD 8.0 billion; • Fishery access payments estimated at USD 1 billion.

22. Mitigating the impact of removing harmful subsidies • To help fishers develop well-designed • Retraining; • Educational; and • Alternatively livelihoods programs; • Example from Hong Kong.

23. Thanks for your attention