Relative effects of fisheries support policies

fisheries policy brief

Relative effects of fisheries support policies

February 2019

olicies designed to reduce the cost of things purchased by fishers, like bait or fuel, are the P most likely to provoke overfishing and illegal, unreported and unregulated fishing (IUU) fishing. uel subsidies deliver less than 10% of their value in benefits to fishers in some cases, making F them the least effective means of transferring income to fishers. ayments designed to support efficient business operations and develop human capital have P the lowest negative impacts, while also delivering significant benefits to fishers.

What’s the issue?

Support policies are intended to help governments reach their objectives for the fishing sector and are a part of the policy toolbox in most countries. These include subsidies for the purchase of fuel, vessels or other expenses; for infrastructure, marketing and other investments in the operation of the sector; for payments to reduce capacity and otherwise adjust fishing effort. Governments spend on average an amount equal to 20% of the value of fisheries landings on supports to the sector, amounting to USD 7 Billion per year in the OECD region and reaching an estimated USD 35 Billion worldwide.

(IUU) fishing more attractive for fishers. All of this taken together reduces the profits and income of fishers, leads to less fish for consumers, and risks the health of the ocean environment.

Improved understanding of how subsidies affect the fishing sector would help governments better target them to their objectives and achieve shared goals such as expressed in the United Nations Sustainable Development Goals (UNSDG) target 14.6, which calls for the elimination of subsidies that contribute to overcapacity and overfishing, or to IUU fishing. Members of the World Trade Organization (WTO) are currently engaged in negotiations to establish rules for fisheries subsidies to deliver on this agreement.

Some of these supports can have unintended negative side-effects, such as increasing fishing effort beyond desired levels or causing excess capacity of fishing fleets, as well as making illegal unreported and unregulated

Figure 1. Percentage change in fish stocks resulting from a USD 5 billion increase in global support, by policy type.

TAC

% 0

Open Access

-1 -2 -3 -4 -5 -6

Fishers' income

Fishers' own capital

Vessels

Use of variable inputs

Source: OECD FishPEM model.

www.oecd.org/agriculture

tad.contact@oecd.org

@OECDagriculture

Use of fuel

Output

Relative effects of fisheries support policies

Figure 2. Share of the value of support that becomes additional income for fishers by policy and by management type, percent TAC

% 100

Open Access

80 60 40 20 0 -20

Fishers' income

Fishers' own capital

Vessels

Use of variable inputs

Use of fuel

Output

Source: OECD FishPEM model.

New research by the OECD, Relative Effects of Fisheries Support Policies, provides policy makers with a new tool to compare different policy approaches in more detail than has been previously possible. The results of the modelbased analysis show that all six fisheries support policies investigated have the potential to provoke overfishing, to lead to fish stocks being overfished, to encourage IUU fishing, and to increase fleet capacity. However, their effects vary significantly in scale, and they can affect different fishers in different ways.

Support that is based on the costs of fishing, such as to help purchase fuel, gear or bait, can increase fishing effort more than other policy options. These types of support are the most likely to increase IUU fishing effort and to lead to stock depletion. They also tend to favour larger fishers.

Depending on the management context, many fisheries support policies do little to improve fishers’ livelihoods.

In particular, as little as 10% of government expenditures to reduce the cost of fuel for fishers can translate to real income gains. The potential benefits of such transfers are lost to increased effort and lower fish stocks or are captured by those selling the subsidised inputs.

By contrast, payments that are designed to help the profitability of fishing operations bring significant benefits to fishers while also having relatively benign effects on effort and capacity. These include, for example, programmes that ensure that capital markets function to provide working capital for operations, or programmes to increase the business or operational skills of fishers.

Payments that directly target fishers’ incomes, such as disaster payments or employment insurance, also do a good job of delivering benefits equitably to all participants in the fishing sector.

The results overall show that it is possible to support the fishing sector and deliver benefits to fishers without unduly provoking overfishing or overcapacity. For example, moving existing support away from gear, fuel, vessels or other inputs towards helping fishers to better operate their business could improve fishers’ income by as much as USD 2 billion per year, reduce pressure on stocks and increase harvest by almost half a million tonnes per year. www.oecd.org/agriculture

tad.contact@oecd.org

What can policy makers do to increase the benefits of the support they provide?

•

Establish fisheries management to control total fishing effort. Support policies provide a much greater benefit to fishers when an effective Total Allowable Catch (TAC) is in place.

•

Move support from policies that subsidise what fishers purchase towards that which helps them better run their fishing operations. For example, replace policies that reduce the cost of fuel with those that help ensure access to working capital for operations.

•

Consider the effect of policies on different actors in the fishing sector. For example, support based on the use of fuel can make smaller fishers worse off than they would be without them as they are displaced by more fuel-intensive fishing operations.

•

Contribute to better understanding the amount of fisheries support at the global level by reporting national fisheries policies in the OECD FSE database.

Further reading • Martini, R. and J. Innes (2018), “Relative Effects of Fisheries Support Policies”, OECD Food, Agriculture and Fisheries Papers, No. 115, OECD Publishing, Paris, http://dx.doi.org/10.1787/ bd9b0dc3-en • OECD (2017), “Support to fisheries: Levels and impacts”, OECD Food, Agriculture and Fisheries Papers, No. 103, OECD Publishing, Paris, http:// dx.doi.org/10.1787/00287855-en • Martini, R. (2012), “Fuel Tax Concessions in the Fisheries Sector”, OECD Food, Agriculture and Fisheries Papers, No. 56, OECD Publishing, Paris. http://dx.doi.org/10.1787/5k9bdccqft30-en

@OECDagriculture