THE UNIVERSIRY OF DODOMA COLLEGE OF HUMANITIES AND SOCIAL SCIENCES SCHOOL OF ECONOMICS AND BUSINESS STUDIES DEPERTMENT OF ECONOMICS AND STATISTICS RESEARCH – PROPOSAL. TOPIC: The contribution of fishing industry….
Fishing Subsidies Nowadays Overview
Fishing subsidies continue to increase, and as of 2009, the figure had reached US$35 billion. The number represents about thirty per cent to forty per cent of the land values that are produced by marine fisheries all over the world (Sumaila, 2015). The existing literature shows that there are three broad groups of subsidies. First, there is capacity-enhancing subsidies. This one involves fuel and construction which promote overexploitation of species of fish (Sumaila, 2015).
Then there are the additional subsidies that are referred to as ambiguous, they include those relating to rural fisher development and vessel buy-back programs. Scholars argue that these subsidies can either undermine or promote the sustainability and availability of fish depending on how they will be rolled out and designed. Lastly, there are subsidies intended for research and management (Sumaila, 2015). These types are regarded as satisfactory subsidies since they confer positive impacts on people’s inherent efforts to manage the resources in the fishing industry for the good of all generations.
Schrank & Wijkström (2003) use different criteria when categorizing fishery subsidies, which differs from the one used earlier. The first category involves direct payments made by the government to the fishing industry, which include but is not limited to equity infusions, compensation for closed seasons, vessel decommissioning payments as well as price support programs.
Second, there are deferrals and tax waivers which include exemptions of tax fuels used for fishing. Schrank, & Wijkström, (2003) believe that if there is the exception of sales tax linked to inputs, especially those used in the fishing industry, such exceptions offer general support for the industry. Government insurance, loan and guarantees are provided by the government to make fishing firms and fishers able to operate when it would otherwise not be possible to do so.
In addition, the government offer fishers insurance since other private insurers consider them highly uncertain as the industry has considerable risk.
Lastly, they point out that the implicit payments to, or charges made against the fishing industry as the other categorization that FAO recognizes concerning fishing subsidies (Pramod et al., 2014). The subsidies groups under this category involve programs that fail to transfer, waive or defer payments that are often generated by the industry and geared towards the government. Such programs include but are not limited
Aquaculture, EEZ, Restriction for implementation to those aimed at reducing prices the industry pays the government for products that fail to meet the market prices, as well as programs that may not include the government payment at all.
Schrank & Wijkström (2003) argue that FAO considers all these programs good for the fishing industry. According to scholars, FAO acknowledges that there are bad subsidies. In addition, the organization also notes a number of these regulations which include but are not limited to fisheries regulations require excluder tool and other safety and environmental regulations. The problem with fishing subsidiaries is that they are not good for the industry for the long term.
Patrick, & Benaka, (2013) argue that the unhindered effect of subventions on fish as part of natural resources is dependent on the overall health exhibited by the stock as well as the fortitude of the management put involved. In particular, fisheries and their corresponding management are rarely operative, and there is overwhelming evidence to show that subsidies by themselves alone can compromise efforts put in place to manage stocks sustainability.
Balsas (2019) has shown that such subsidies not only disorganize the market but also often negatively affect fishers that receive fairly fewer subsidiaries. It is worth noting that most subsidiaries tend to be taken up large-scale corporate size fishers belonging to developed nations as opposed to those in developing countries.
Concerning commercial fishing, the enterprises appear to be driven by profit, which implies that an increase in profit increases fishing. The problem, according to Baden, & Bianconi, is that this stimulation of profit increases a certain kind of race for fish in the industry. This harms the population of fish which need to be maintained for future generations.
Even though certain players within the fishing industry have blamed regulations put in place by the World Trade Organization for the current overfishing taking place in Massachusetts, FAO does not subscribe to this idea.