economic incentives in fisheries
TRANSCRIPT
Economic Incentives to improve trawl fisheries management
By Robert Lee FAO Fishery Industry Officer
FAO Regional Office for Asia and the Pacific
Many years of work yet the resources continue fished to their limits or
overfished.
True or False?
Why is this so?What role do Economic
Incentives play?
Contents
• Incentives and Disincentive• Fishing Fleets and Subsidies• Drivers• Different types of subsidies• Policies ?• How can we make them work in our favor• Some case studies, What worked and
what didn’t• Conclusions
Incentive Disincentive
Something that
ENCOURAGES a person to
determination or action
Something that causes a
person to decide NOT to do something
Incentive / Disincentive ????• Depends on who gives and who receives• Who’s objective? Can work both ways….• May require negotiation or not• Usually agreed before an action (written )• May or may not be given on completion of
the agreed action/s• Requires verification on completion• May be in cash or in kind• Who pays – When does it stop? How much?
Subsidy intensity by regionratio of subsidy to value of catch 2003
A bottom-up re-estimation of global fisheries subsidies. Sumaila. U.R., Khan.A., Dyck A.J., Watson. R., Munro G., Tydemers. P., Pauly. D., 18/08/2010
Fuel subsidies study in the Asia Pacific Region Globally Fuel Subsidies (Sumalia, Teh, Watson, Tyedmers, Pauly 2008)
Developed countries = 3 – 7 billion USD Developing countries=1.17 – 1.5 billion USD
In 2000, countries with fuel subsidies
China Philippines India Samoa
S. Korea Samoa Indonesia Tonga
Australia Solomon Is. Malaysia Japan
Sri Lanka Thailand Taiwan Vanuatu
BangladeshWhat does the picture look like today? How many countries give fuel subsidies? Lack of studies……….
Fishing Fleet• Global fishing Vessels 4.360.000 • Asia fishing vessels 3.180.000 (73%)
% change # vessels 2007 -2010
•Increased fuel prices
•Inflation
•Macro economics
•Stagnation in growth
Fishers complain
•Decrease interest rates
•Subsidies
•Energy efficiency
•Loans
•Repairs
•Produce more fuels
Reduce costs and increase efficiency
SituationPolicy
Response
Beneficial Subsidies
Effort increasing subsidies
Ambiguous Subsidies
Result
Beneficial subsidiesDesired Effects & Objective Method/Approach
Reduce fishing effort and Improved food security
Subsidies to promote conversion from fishing to aquaculture and Buy Out
Better Fisheries management
MCS, Stock Assessment, Habitat and Stock enhancement, Research and Development
In technologies in capture and processing, Subsidy to use non destructive fishing gears. Development
of Marine Protected Areas and Artificial Reefs. Funds to combat IUU
Promote culture and aboriginal peopleSubsidy / incentive to carry on indigenous fisheries
management systems
Improved processing Subsidies for Good corporate responsibility, reduce
GHG and improve efficiency savings
Reduced GHG from sector Alternative and less polluting fuels and technology
Export revenue generation Promote Certification schemes,
Fuel subsidies that increase capacityDesired Effects / Objectives Impact Result
Stimulate slowing economy
Reduce transport and production costs
Maintain export competitively
Reduce or maintain cost to consumers.
Expansion of territorial presence
Gain political mileage
Gain a trade advantage
Increase food security
Fuel Subsidy leading to Over capacity Over effort Over subsidy, Increase fuel consumption and Undermine fuel optimization efforts and slow uptake of new technologies (LIFE)
Fishing port construction and renovation programmes support the sector with cheap mooring making fishing less expensive
Price and marketing support, processing and storage infrastructure programs, leading to Over capitalization in processing driving demand leading to over capacity
Tax exemptions and cheap loans, insurance support, duty free inputs, support programs. Financial gains invested in more production (boats and gears)
Subsidized Foreign Access agreements
Anonymous subsidiesIntervention Positive Negative
Emergency rehabilitation programmes after disasters
Stabilize food security, kick start exports, reduce
dependence on food aid, restart livelihoods
Can lead to over capacity (new boats and gears),
should be accompanied by management plans
Vessel and licenses buy back - scrapping of vessels
Reduce fishing capacity rapidly
Effort Transfer, anticipation = > effort. Creep back if not
controlled
Assistance programs to temporarily stop fishing – unemployment insurance,
retraining, social security etc
Reduce effort, improve stocks, maintain social
standards of fisher communities
Subsidy dependence, remain in fishery. Raise fish prices,
reduce costs of fishing. Requires management plans
Provide sea safety equipment and
modernization of vessels to reduce injury and death
Make fishing safer, new cadre of younger fishers,
make fishing more socially acceptable and professional
< Fishing costs and > fishing effort if no management in
place
Assistance programmes to SSF.
May enhance poverty alleviation and food security
May drive over capacity in coastal areas, in migration to
fishing
Incentive vs. Disincentive
Incentive DisincentiveCatch report = low fees Catch report = ++ Taxes
Reduce effort = > Fish Reduce fish = < Income
Fuel Subsidy = > Stimulus National Economy
Fuel Subsidy = < Expenses on Fuel savings
Easy Loans = viable vessels / increase effort
High interest = < viable vessels / reduced effort
Effectively participate in fisheries management = ?????
Possible loss of income and investment = No clear incentive ?????
Trawl Fisheries• Fuel consumption driven by
–vessels size and fishing technique. Fuel > 40% of the total operating costs. (EU and Thailand)
–Trawlers consuming the largest amount of fuel per fishing day of all fishing types
–Small scale fleets, economically much less dependent on fuel price.
–Trawlers consume more but have a higher CPUE and fuel consumption per Kg
–Economically very sensitive to fuel price
Asia pacific Economic Cooperation -2000Study Into the Nature and Extent of Subsidies in the
Fisheries Sector of APEC Members EconomiesCommittee on Trade and Investment
“The possible negative effects of some kinds of transfers can be reduced or minimized when transfer policies and resource management polices are coherent.” Therefore, there is an issue regarding the efficiency of the subsidy programs”.
Synopsis • Incentive for Fisheries Management• Mostly capacity enhancing - • Fuel subsidy or cuts = greatest impact on trawlers• Incentives vs. disincentive • Proper use of incentive = Proper results• More analyses (vessels and value chain) • There is money = in 2003 there was an estimated 2.7 Billion
Subsidy Estimates 2003 (US$ 000's))
Country BeneficialCapacity
EnhancingAmbiguous Total
Indonesia 178,772 787,647 23,279 989,698
Philippines 286,038 609,893 22,895 918,826
Thailand 30,470 497,333 24,796 552,599
Vietnam 283,229 414,184 0.00 697,413
Papua New Guinea 216,373 427,468 18,174 662,015
Totals 994,882 2,736,525 89,144 3,820,551
A bottom-up re-estimation of global fisheries subsidies. Sumaila. U.R., Khan.A., Dyck A.J., Watson. R., Munro G., Tydemers. P., Pauly. D., 18/08/2010
Case Studies
Case 1. Grenada • Objective
– Develop the pelagic long line fishery safely• Strategy
– Provide subsidy –duty free equipment and fuel once a year at Xmas
– Subsidy conditional on updated fishing license
– Fishing license only issued with valid safety certificate
• Measures– Yearly inspections, Training, VMS/VSD
Case 2. New Zealand Sanford Ltd. • Objectives– Sustainable fishing– Profitable, environmentally responsible
• Strategy– Maintain MSC certification and maintain ISO status– Energy efficiency and sustainable development policies – Reduce emissions and GHG
• Measures– Reduce incidental catches of birds and mammals and
impacts on sensitive areas.– Use of fish offal to produce oil to reduce fuel costs– Recycle waste from processing and fishing operations– Corporate – Treatment of workers, good corporate
citizenship – clean up and awareness raising
Case 3. Asia/Pacific Region• Objective– Ministerial policy increase production of B100 bio fuel.– Large surplus 370 000 tonnes– Replace more costly diesel in fishing vessels with B100– Prevent the price of B100 falling due to large inventory– New stocks expected March – April 2013
• Strategy– Provide cheaper fuel to fleet at subsidized price– No clear if any conditions will be applied
• Measures – Not clear – Improved monitoring, catch declarations, improved safety
compliance, cost of conversion to energy efficient options– Will require monitoring system. Political reality
What can be done?
Policy• Energy and incentive policy congruent with
Fisheries Management Plans. What are these?• Formulate Fisheries Energy Policies and have
clear objectives– Reduce emissions, consumption, Increase
efficiency (Kw./Kg) and provide incentives• Holistic view link other subsidy policy (Loans,
Guarantees, Price support, tax exemptions, infrastructure, etc).
• Link Economic and environmental policies• Value Chain studies
Management• Level and time bound subsidy/incentive
related to status of stocks• Use subsidies/incentive for R and D, VMS,
energy efficient technologies• Integrate safety at sea and fisheries
management• Use subsidies as incentive to comply with
Regulations – requires monitoring systems. Who?
• Use subsidy for fisher groups to conduct MCS in protected and sensitive zones
Technology• Make sure installations for new
alternatives do not compromise safety – e.g. biogas
• Technical and economic studies of fuel and value chain fishery subsidy viability.
• Calculate impacts of Ambiguous subsidies• Use Cost of Conversion as subsidy to new
technology, emission reducing fuels, optimization and LIFE
• Monitoring and evaluation of measures
Conclusions• Subsidies / incentives can have negative and
positive impacts on fisheries management • Subsidies and incentives should result in
environmental sustainability.• Energy policies and fisheries policies need to be
integrated for maximum benefit and coherence.• Sustainable development is good business.
(Energy, living resources, recycling, efficiency)• Politics should not endanger responsible
resource management
So, why have the resources continued to be depleted after decades of
fisheries management?
Possible answers• Economic incentives that are inadequate or
inappropriate , that do not reflect the real costs and become disincentives.
• Expecting that people will do the right thing to protect the environment
• Spending billions in capacity enhancing subsidies
• Fisheries managers have no economic incentives to offer protection and conservation of resources.
• Little effective dialogue so because of lack of something to exchange – in spite of money available
What incentives can you suggest for trawl fisheries?
• Reduce capacity (Number of vessels or time fishing)
• > viable vessels• > production• Effectively participate in fisheries management • Reduce bycatch thru BRD, mesh, technical • Temporal and spatial closures• Reduce fuel consumption and GHG
What are the incentives??
Cannot know until we do the analysis of the operations and the value chain
Or its just guess work
Thanks
Reference materials• Fuel price increase, subsidies, overcapacity and resource
sustainability - http://icesjms.oxfordjournals.org/content/65/6/832.full.pdf+html
• World Energy Outlook 2012 - http://www.iea.org/publications/freepublications/publication/English.pdf
• Intermediate technology and alternative energy systems for small scale fisheries - http://www.apfic.org/archive/symposia/1980/53.pdf
• Study into the Nature and Extent of Subsidies in the Fisheries Sector of APEC Member Economies, 2000 - http://publications.apec.org/publication-detail.php?pub_id=668
Reference materials
• Safety at sea as an integral part of fisheries management - http://www.fao.org/docrep/003/X9656E/X9656E00.HTM
• Futures contracts of crude oil NYNEX –http://quotes.ino.com/exchanges/contracts.html?r=NYMEX_CL
• International centre for Trade and Sustainable Development - Tackling Perverse Subsidies in Agriculture, Fisheries and Energy http://ictsd.org/downloads/2012/06/tackling-perverse-subsidies-in-agriculture-fisheries-and-energy.pdf
Thanks for your attention