Fishing for subsidies

Fish the world over are being removed from the oceans at an alarming and unsustainable rate. One estimate from a recent WWF report suggests that the populations of fish species which are caught by humans for food have halved in recent decades, with selected species witnessing even more pronounced declines in numbers. Approximately a quarter of all elasmobranchs – that is, sharks, rays and skates – for instance, verge upon extinction, primarily due to unsustainable levels of fishing. Strong and increasing world demand for fish and seafood derivatives look set to place an additional pressure on an already burdened resource.

The consequences of such relentless and unrestrained extraction can be catastrophic for ecosystems. The removal of apex predators from certain waters, for instance sharks and tuna, may trigger a mushrooming of species lower down the food chain, which can go unchecked in the absence of a natural control mechanism. Conversely, the overexploitation of herbivorous fish which arrest algal succession can spell disaster for marine environments, such as corals and coastlines, because the algae toxify waters and impinge upon the ability of reefs to take hold and flourish. Tackling overfishing, therefore, will be vital to preserve not only some of the most precious fish species, but also the wider environment at large.

Solutions to overfishing

An earlier blog post explored the possible introduction of ‘individual transferable quota’ (ITQ) systems into areas which are not currently subject to them, as a solution to the problem of overfishing. Quotas like these permit fishers to catch an allotted quantity of a species of fish over a certain period of time. Indeed, ITQs have proven to be at worst better than unregulated arrangements, and at best a genuine method of ensuring sustainable fishing. Yet, given the complex and politicised nature of ITQs, they have often proved challenging to implement in practice.

Even so, other, more moderate, solutions to the problem of unsustainable fishing are available. One particular impediment of efforts to move towards a more sustainable system of fishing, for instance, is the copious subsidies which enable an uneconomically large fishing fleet to exist. Whilst challenging to definitively calculate, aggregated fishing subsidies across the globe total an estimated $35 billion.  

First of all, it must be said that not all subsidies associated with the fishing industry are necessarily deleterious for sustainability. There are examples of desirable behaviour being encouraged through subsidies, such as incentivising fishers to trade in old, environmentally harmful fishing gear – like drift nets – for cash payments, which they can put towards newer, safer equipment. On some analyses, approximately $15 billion of subsidies worldwide are directed into broadly socially beneficial programmes – including funding for the rehabilitation of ecosystems, fisheries management schemes, and environmentally-oriented research and development.

The harmful effect of subsidies

Sadly, however, the majority of state-administered aid to fishers is not so ecologically ameliorating. The conservation group Oceana have calculated that as little as 1% of all subsidies granted by EU member states to their native fishing industries had beneficial consequences for the environment. Taking the UK in isolation, over €17.5 million of subsidy payments were classed as detrimental, over €160 million as ‘ambiguous’, and none at all were regarded as environmentally beneficial. 

Particularly perverse are so-called ‘capacity enhancing’ subsidies, which pay for the operational costs associated with fishing, such as fuel expenditure or port construction, thereby permitting a greater number of vessels to take to the seas than would be the case otherwise. Indeed, amongst developed and developing nations, an estimated 22% of all fishing subsidies are directed towards reducing the cost of fuel. In addition, research has found that 90% of capacity enhancing subsidies are granted to large-scale, industrialised fishers, as opposed to artisanal, subsistence fishers, which have less of an impact upon marine environments.   

Policies such as capacity enhancing subsidies are increasingly recognised as damaging to our seas, and hinder efforts to achieve sustainability in fish stocks. But not all subsidies are necessarily bad. Those which are tailored to encourage environmentally friendly practices will assist fishers to adapt how they operate for the better. The industry will also require some level of subsidy to pay for monitoring and data collection, each of which help to ensure the rebuilding of fish stocks and their maintenance thereafter.

Much in the same way as has been touted for land agriculture, when the UK withdraws from the EU, the chance arises for greater consideration to be given to how fishing subsidies are allocated. It is doubtless that reducing payments which are capacity enhancing will force some fishers out of the market. But if the government chose to do this, one option could be to reinvest the savings from curtailing capacity enhancing subsidies into measures which help our marine ecosystems to thrive. Further, for those fishers efficient enough to remain, they will do so within an environment which they can be sure will be economically productive for years and decades to come.

Eamonn Ives is a researcher at Bright Blue

Net losses: solving fishing’s sustainability crisis

With respect to the UK’s fisheries, the Rt Hon Michael Gove MP spared no time at all in flexing his muscles as the new Environment Secretary. Just weeks into his brief, Britain’s withdrawal from the London Fisheries Convention had been triggered, in a move which Gove argued would lead to a “more competitive, profitable and sustainable industry”. Specifically, it paves the way for the UK to manage its own fishing quotas, as well as deciding who gets to access British waters. Done properly, this could result in huge gains for the natural environment.

Fisheries are an example of a common pool resource – whereby access to a resource is open to all. Coupled with rational individual actors, common pool resources rarely experience sustainability. In the absence of regulation, such resources will be perpetually exploited, until, eventually, they collapse entirely. This fact has long been understood, from economists-come-ecologists such as William Forster Lloyd, Elinor Ostrom, and perhaps most famously of all, Garrett Hardin, with his eminent 1968 paper The Tragedy of the Commons.

Scale of the problem

According to a report from the UN Food and Agriculture Organisation, approximately 58% of fisheries are classified as ‘fully fished’ (i.e. operating at, or close to, optimal yield levels), and a further 31% are overexploited, whereby they are fished at a biologically unsustainable level. WWF estimate that the global fishing fleet is between two to three times larger than what the oceans can realistically support. Closer to home, favourite fish species such as haddock and cod have been removed from the Good Fish Guide, a website run by the Marine Conservation Society which informs British consumers about the sustainability of various seafood species which they can expect to find at their local supermarket or fishmonger.

The problem of overfishing extends far beyond the specific species in question. Given just how intricately enmeshed marine ecosystems can be, an unnaturally rapid depletion of one species can have serious implications for many others. For instance, the unsustainable extraction of herbivorous fish from oceans can lead to elevated levels of algal growth, which in sufficient quantities can become toxic for other species which remain. Further, when essential keystone predators such as sharks and tuna are overfished, there tends to be a swelling in the numbers of fish species lower down the food chain, which can similarly knock ecosystems out of kilter.

As well as being environmentally troubling, overfishing poses obvious economic difficulties, too. Within the EU alone, it is thought that unsustainable fishing results in €3 billion of lost productivity per annum, taking an estimated 100,000 jobs along with it. Globally, the burden of declining fish stocks has fallen most heavily on the world’s poor, with estimates from the World Bank and the UN Food and Agriculture Organisation claiming that between 90% and 97% of those employed in the fishing industry – whose income is patently dependent upon reliable and plentiful fish stocks – come from developing nations.

Answers from the Arctic

Given the capricious and ever fluctuating nature of fish shoals, it may appear difficult to know where Governments can even begin to act, should they wish to implement policies to ensure that fisheries remain, or once again become, sustainable. However, that is not to say there are no antecedents whatsoever.

Perhaps the best-known example amongst environmental economists of a policy which has enjoyed success, at least relative to that of other schemes, is Iceland’s system of ‘individual transferable quotas’ (ITQs). Such quotas grant individual fishers the privilege to land a certain quantity of fish, typically by weight, within a given time frame. ITQs can also be traded, meaning that if a fisher wishes to relinquish all or part of their allowance, they can sell it to other, perhaps more efficient, players in the industry. Importantly, the amount of fish which can be extracted from the ocean will, or ought to, be set at a level which is ecologically sustainable – i.e. allows fish numbers to replenish at a rate equal to or quicker than that at which they are removed.

ITQs are seen to be better than the more rudimentary system of ‘total allowable catch’ (TAC), which simply states the amount of fish which can be extracted from the ocean by all involved, collectively. This has led to perverse and often dangerous consequences, such as ‘fishing derbies’, whereby competing fishers are effectively encouraged to recklessly race against each other to harvest as much fish as they possibly can until the TAC is exhausted.

It is true that ITQs do not offer a perfect solution to the problem of overfishing. They require strong (i.e. expensive) governmental oversight and enforcement to function properly, and the task of setting the quota still falls on fallible bureaucrats, susceptible to regulatory capture and Hayekian knowledge problems. In this respect, the tragedy of the commons could quickly become the tragedy of government failure. Indeed, there is widespread anxiety amongst the environmental and scientific community that the existing EU quotas are worryingly generous, and do little to effectively engender sustainability in fishing. 

There are also questions about how quotas ought to be allocated to fishers. Generally, they are either based on historical catch, or through an auction. The former can be contentious in the sense that it may unfairly entrench incumbent players who already enjoy a privileged place in the market. Whereas with the latter, fishers are critical of the added cost they have to bear. Nevertheless, when appropriately administered, ITQs do appear to be an intuitive way to circumvent the problem of overfishing.  

Conclusion

Fishing has long been an intimate part of many countries’ history. Particularly for island nations like the UK, it has often been the only genuine source of income for entire communities. It is not surprising, therefore, that many feel an innate desire to shelter fishers from what some may regard as the vicious and unfeeling realities of global market competition.

However much one may wish to help fishers, though, it is increasingly apparent that the unsustainable nature of the current system does not do so. As scientific knowledge twinned with economic understanding has advanced, it is clear that to continue as we currently are would only store up problems in the long run. ITQs have been shown to bolster fish stocks, and are certainly one possible avenue to explore on the voyage to sustainable fishing.

Eamonn Ives is a researcher at Bright Blue