Subsidies weaken the sustainability
of global fisheries while increasing
inequality among fishers
U. Rashid Sumaila
Fisheries Economics Research Unit
Sea Around Us project
The University of British Columbia
Vancouver, Canada
r.sumaila@fisheries.ubc.ca
UNCTAD and ComSec AHEM on Trade in Sustainable
Fisheries, Sep 29 – Oct 1, 2015
Outline of talk
• How important are fisheries to us?
• Opportunities and challenges facing ocean
fisheries worldwide;
• Fisheries subsidies;
• Suggestions for subsidies reform.
How important are fisheries to us?
•
•
•
•
•
•
Food and nutritional security;
Economic security;
Social security;
Recreational values;
Cultural and spiritual values;
Ecosystem function and service.
L.Teh
D. Varkey
Food and nutritional security
• Annual ocean fish catch is ~80 million t;
• Fish is a good source of protein, micronutrients, minerals and essential fatty acids;
• Provides 3 billion people up to 15% of
dietary animal protein;
• For low-income food-deficit countries, the
contribution of fish to total animal intake is
nearly 20%.
FAO, State of World Fisheries and Aquaculture (2014)
Economic security
Gross revenues from marine
capture fisheries worldwide
are estimated at between US$
80 and 85 billion annually
(World Bank, 2009, Sumaila et
al. 2012);
Total impact throughout the
global economy is between
US$ 220 and 235 billion in
2003 (Dyck & Sumaila, 2010).
Social security through jobs
100
90
260 million people worldwide
involved in marine fisheries, including
direct and indirect sector
70
60
50
40
30
Direct
Total
Indirect
20
10
Thailand
Nigeria
Myanmar
Pakistan
Philippines
Vietnam
Bangladesh
Indonesia
China
0
India
Employment (million jobs)
80
Top 10 countries providing marine employment
Teh and Sumaila (2011)
Opportunities and challenges to
global fisheries?
Climate change impacts
Physical/Chemical
changes in the
ocean
 ↑ Sea temperature;
 ↑ acidification;
 Δ ocean current
pattern;
 Δ salinity;
 retreat of sea ice;
 ↑ coastal hypoxic
& oxygen min.
zone;
 ↑ sea level.
Biological / ecological
changes in the ocean
INDIVIDUAL
• Physiology;
• Growth; &
• Body size.
POPULATION
• Distribution;
• Abundance; &
• Recruitment.
COMMUNITY
• Species
composition;
• Invasion/extinction.
ECOSYSTEM
• Productivity; &
• Species interaction.
Cheung, Watson & Pauly (2012): Nature
What are fisheries subsidies
• A subsidy is a “financial contribution [direct
or indirect] from the public sector that grants
private benefits to the fishery sector (World
Bank 2009).
Economic justification
for subsidies
• Externalities:
– occurs when producing or consuming a
good causes an impact on third parties
not directly related to the transaction
• Positive externality → provide subsidies;
• Negative externality → impose taxes.
Categorizing subsidies
•
•
•
Beneficial subsidies (‘investment’
programs in fish stocks);
Capacity-enhancing (harmful) subsidies
(‘disinvestment’ programs in fish stocks);
Ambiguous subsidies (programs may
benefit or harm fish stocks).
Khan et al. (2006); Sumaila et al. (2013)
30/09/2015
Global fisheries subsidies
11
Subsidies are substantial
Capacity-enhancing subsidies 83% of total USD 35 billion
Subsidies to developed country fisheries at 65%.
30/09/2015
Sumaila et al. (2013)
12
Subsidies by type → fuel
subsidies = more than 20%.
30/09/2015
Global fisheries subsidies
Sumaila et al. (2013)
13
Subsidies are made for
inequality
Subsidy per fishery worker (USD 000)
300
250
Developing countries
200
Developed
150
100
50
Beneficial
30/09/2015
Capacity enhancing
Ambiguous
Global fisheries
subsidies
Teh
& Sumaila,
14
2011; Sumaila et al. (2013)
Mexican fisheries subsidies
90
Small-scale fisheries total = US$ 22 million
Industrial fisheries total = US$ 191 million
Subsidies (2014 US $ million)
80
70
60
50
40
30
20
10
0
Fisheries
mangt.
MPAs
Fishery R&D
Fuel
subsidies
Fisher
assistance
Approximately 12% of all fishing subsidies go to the small-scale sector
Schuhbauer & Sumaila (in prep.)
Subsidies and overfishing
25
90
20
70
60
Catch
15
50
40
10
30
20
Effort (GW or watts x 109)
Catch (million tonnes)
80
5
10
1950 1955 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005
FAO Fisheries Statistics
Year
*Effective effort indexed on 2000 based on average 2.42% increase annually
Subsidies and overfishing
25
90
20
70
60
Catch
15
50
40
10
30
20
10
Effort (GW or watts x 109)
Catch (million tonnes)
80
5
Effective effort*
1950 1955 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005
Watson et al. (2013)
Year
*Effective effort indexed on 2000 based on average 2.42% increase annually
Impact on food & nutritional security
Potential catch loss by region of the world
Srinivasan, Sumaila et al. (2010)
Impact on economic security
80
Percent
60
40
20
0
-0.02
-0.01
0
0.01
0.02
Pre-tax profit share of sales for 1000 fishing companies
Sumaila et al. (2012): PLoS One
Push reform at several levels
•
•
•
National level;
Regional level;
Global level.
30/09/2015
Global fisheries subsidies
20
Subsidies (US$ million)
National effort: Indonesia
3%
250
200
15%
Small-scale
Large-scale
150
100
100%
50
0
Beneficial
Capacity
enhancing
Ambiguous
Schuhbauer & Sumaila (in prep.)
Core group of countries adopts
fisheries subsidies disciplines
• Examples:
– TPP may include disciplines on subsidies to overfished stocks and IUU vessels;
– The ACP group of countries;
– The TTIP countries (EU and USA).
Establish multilateral disciplines
built step-wise and ‘bottom up’ to fill
remaining ambition gap
• A group of countries, perhaps in
partnership with Intergovernmental
Organisations and NGOs, could stimulate
collective action with bottom-up voluntary
commitments to subsidy reform.
Establish multilateral disciplines
built on areas of agreement in WTO
negotiations
• Chair report 2011, areas of more
agreement = subsidies to IUU vessels,
transfer of vessels, access agreements;
• Key gap: Subsidies to over-fished stocks
arguably should have been listed.
Align incentives by focusing
international subsidy negotiations
on international stocks
• WTO negotiations cover subsidies to both EEZ
and High Seas; shared and not-shared stocks;
• Re-start the WTO negotiations giving a higher
priority to subsidies that affect international stocks;
• Build evidence around impact of domestic
subsidies on domestic fish stocks in key countries;
• Lobby domestically and provide incentives
internationally for domestic reform.
Conclusions
•
Build political will by tackling short-term
socioeconomic & political considerations
–
•
•
‘switching’ of ‘bad’ to ‘good’ subsidies
Develop a cadre of local opinion leaders
within countries who really see the
benefits of eliminating harmful subsidies;
Encourage national and regional efforts
that can develop into a multilateral
agreement.
Thanks for your attention
Thanks to UNCTAD & COMSEC
for the invitation