Bridges Weekly Trade News Digest • Volume 12 • Number 34 • 16th October 2008

Report: Economics Justifies Universal Elimination of Fisheries Subsidies

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The marine fishing industry loses up to US$ 50 billion annually from poor management, inefficiencies and overfishing, according to a new report by the World Bank and the Food and Agriculture Organisation (FAO). The report, titled ‘The Sunken Billions: The Economic Justification for Fisheries Reform,’ was launched at the World Bank headquarters in New York on 8 October and debated at the recent IUCN World Conservation Congress in Barcelona.

“The real cumulative global loss of wealth over the last three decades period is estimated at $2.2 trillion,” the report said. “The annual loss is equivalent to approximately 64 percent of the landed value of the global catch, or 71 percent of the value of global fish trade in the base year (2004).”

The report also emphasised that the estimate of economic loss is a conservative one, as it does not account for several important factors such as the costs of subsidies and illegal fishing activities, and the benefits of healthy marine ecosystems.

According to the report, most of the economic losses - which represent the difference between the potential and actual net economic benefits from global marine fisheries - can be attributed to two causes. First, fish stocks are now so depleted that the cost of finding and catching them has risen substantially. Over 75 percent of the world’s fish stocks are either fully exploited or over exploited, FAO says.

The second main factor is that, thanks to the fact that there is now an overabundance of ships on the high seas, the redundant investment and operating costs have dissipated the economic benefits of fishing. Indeed, despite technology advancements, the global marine catch has remained stagnant at around 80 million tonnes for over a decade. The current marine catch could be achieved with half of today’s global fleet, the report argued. Academics have blamed subsidies for driving the irrational expansion of fishing fleets.

The increasing prices of fuel and food are cited as pressuring governments to provide subsidies to fishing industries. But when considering whether the economic benefits exceed the costs of subsides, the report said, “in the case of fisheries, the answer is almost invariably ‘no’.”

Therefore, the report declared that even aside from the well-documented argument for action to prevent massive biological losses, the economic losses alone “justify increased efforts by national economic policy makers to reverse this annual haemorrhage of national and global economic benefits.”

Improved governance of marine fisheries could recapture a substantial part of the annual economic loss, the report said. A reduction in fishing effort would increase productivity, profitability and net economic benefits, while rebuilding fish stocks would lead to increased sustainable yields and lower fishing costs.

The report also noted that fisheries reform could also help improve livelihoods and food security among the world’s poor. “Fish is the main animal protein for over 1 billion people. It provides livelihoods for over 200 million people and 90 percent of these people are in developing countries.”

The report comes at a time when the Doha Development Round’s Rules negotiations, which cover negotiations on the reduction of fisheries subsidies as well as dumping and subsidies and countervailing measures, have been at a standstall while negotiations on agriculture and non-agricultural market access negotiations have taken centre stage in attempts to reach modalities, or compromise between the two.

To access this report, please refer to http://www.fao.org/newsroom/en/news/2008/1000931/index.html.

ICTSD reporting; “Fisheries waste ‘cost billions’,” BBC, 8 October 2008.