Governments around the world use fisheries subsidies to promote fishing, typically by supplementing fishers’ income or lowering their costs. But subsidies can harm fish stocks when the payments allow fishers to travel farther, stay at sea longer, or build more capacity than they would have without the aid. That means subsidies often promote fishing beyond sustainable limits. In fact, a recent study shows that without government subsidies, as much as 54 percent of today’s high seas fishing grounds would be unprofitable at current fishing rates.
As governments prepare for critical World Trade Organization (WTO) meetings on fisheries subsidies in Geneva from July 23 to 25, Ussif Rashid Sumaila, a 2008 Pew marine fellow and an author of that study, offers critical perspective. As director of the fisheries economics research unit at the University of British Columbia Fisheries Centre in Vancouver, Sumaila focuses on the economic impact of these subsidies. He used his Pew fellowship to document the financial factors that contribute to unsustainable commercial fishing and the depletion of ocean resources.
Q. Why are some fisheries subsidies harmful from both economic and environmental perspectives?
A. Let’s start with pure economics. Usually when you run a business, you have to cover all your costs or you don’t survive. You go bankrupt. Because subsidies are paid out of taxpayer money, this changes the economic equation for fishing enterprises. The government money covers the losses. The business then does not experience the real cost of doing business and therefore continues fishing much longer and at greater costs to society. This results in overcapacity and overfishing. Subsidies also distort trade because fishing enterprises that receive subsidies are at an advantage in the marketplace over those that don’t. This crowds out fishers who are not artificially overcapitalized and aggravates the overfishing problem. This is why economists don’t like subsidies.
Environmentally, it’s even more of a problem. Even without subsidies, people tend to overfish and compete for fish. So a situation that was already dire has been made worse. We now have large fishing enterprises competing for a limited supply of fish, catalyzed by taxpayer money.
Q. What do you think people don’t understand about fisheries subsidies?
A. It can be a challenge for some people to make the connection between conservation and subsidies. Even if a quota is imposed, it is usually difficult to determine it accurately. Most countries don’t have the means or the ability to do basic fish stock assessments or to determine which stocks are overfished. Currently, only a few countries can set and enforce quotas effectively. The combination of weak quotas and ineffective enforcement with large government subsidies is a lethal one, causing overfishing in many fisheries around the world.
Also, some government officials think that fisheries subsidies are helping the poor when in fact it is the opposite. Countries often have no mechanism in place to channel where the money goes; it just goes to the whole fishing sector. And yet there is this misconception that [subsidies] are helping small-scale fishers and low-income fishing communities. What they don’t realize is that most subsidies go instead to large-scale industrial fleets. In fact, a recent estimate shows that less than 16 percent of the total global subsidies are allocated to small-scale fishers. And most of those are “good subsidies,” such as funds to improve fisheries management or conduct scientific research on fish populations. By giving large-scale fleets capacity-enhancing subsidies that contribute to the overexploitation of fish stocks, governments are helping to undermine the resource base upon which the entire human population—but especially low-income coastal communities—depend for healthy animal protein and micronutrients.
In a nutshell, rich countries account for about 60 percent of global fisheries subsidies, leaving thousands of fishing-dependent communities [elsewhere] struggling to compete with subsidized rivals. This threatens the food security of millions of people as industrial fleets from far away deplete their ocean stocks and leave them with nothing.
Q. You are among the authors of a new paper, “The Economics of Fishing the High Seas.” What is the key takeaway from that research?
Up until now, we haven’t had much transparency or information around the economic aspects of fishing on the high seas. But thanks to new satellite technology, we have access to new data. What we learned is that the fisheries subsidies that some industrial fishing fleets receive are larger than the profit they make fishing the high seas. In fact, as much as 54 percent of the present high seas fishing grounds would be unprofitable at current fishing rates. What that means is that these subsidized fleets would run losses without the government money. These subsidies are sustaining them and allowing them to continue the environmentally destructive practice of sea-bottom trawling, for instance. The irony here is that subsidies were meant to help poor people with small boats get food more easily, but now they’re having the opposite effect. They’re hurting small-scale fishers, threatening food security, destroying the environment, and it doesn’t even make sense from an economic point of view.
Q. Last December, members of the WTO failed to reach agreement on reducing harmful subsidies. Why weren’t they able to do so last time, and why is there cautious optimism that the talks could be more successful this time?
Some countries are still unwilling to recognize the harmful effects of fisheries subsidies, but they need to think of the long-term benefits for people as opposed to the smaller societal short-term economic and political gains. I am hopeful that countries will come around. I know there is a lot of headwind, but there are signs that things are changing. Many developing countries, for instance, are now pushing for harmful subsidies to go. They’re realizing it’s just bad economics. If you’re a developing country fisher, you get one-seventh of the amount [in subsidies] that your developed country counterpart gets. It doesn’t make sense. It makes their fisheries unviable in the international market because they are selling to the same market as rich countries. Economically, they are suffering.
Q. As a scientist, could you speak to what implications overfishing can have for human health?
A. Fish is animal protein that is good for the poor and rich alike. On any day in Washington or London, you could go to a seafood restaurant and eat, although there are plenty of other options for protein. But fish is often the only source of protein available to some coastal communities around the world. Fish is good protein, full of micronutrients that you can’t find in the developing world through, for example, bottled supplements.
Also, half of our oxygen supply is coming from the ocean. If half of your breath is coming from the ocean, it is half your life, right? And life in the ocean absorbs a big chunk of the carbon we generate on land. This and other reasons make it crucial that we keep the ocean teeming with life. We need the fish in the high seas to take in this carbon and to bring carbon levels down. One study has estimated that the value of carbon sequestered by marine animals in the high seas is 10 times the value of the fish caught in that part of the ocean. If you subsidize high seas fishing, you are taking life out of the high seas and reducing the ocean’s ability to absorb carbon, with huge implications for human health and well-being.