USA: will US fishermen survive without subsidies?

Beginning of April i came across a very interesting article written by Gary Stoller for USA Today. The title of the article is “Many commercial fishermen are hanging up their nets” and it depicts a rather gloomy picture of the state of the US fishing industry.

I was struck by some of the passages of the article. Here is one example:

"But the U.S. catch is falling. American fishermen landed 9.3 billion pounds, or $4.2 billion worth, of fish in 2007. That's the smallest quantity since 2000 and second-smallest in 20 years, the most recent numbers available from the government's National Marine Fisheries Service show.

Signs of trouble in the industry can be seen on every coast:

•A January report from the National Oceanic and Atmospheric Administration found that the average shrimp boat owner in the Gulf of Mexico doesn't make a profit each year. For the average boat, "the financial and economic situation is bleak," the report concludes.”

Interestingly enough the shrimpers from the Gulf of Mexico were successful in their push for anti-dumping duties on imports of shrimp products from Brazil, China, Ecuador, India, Thailand and Vietnam. In addition to the protection against allegedly dumped exports from these countries, the US shrimpers were subsidized by way of the so called “Byrd Amendment”, i.e. the transfer of collected anti-dumping duties to the U.S. shrimpers.

So, if the anti-dumping measures disappear and the Byrd-Amendment payments cease then one could conclude that without some sort of support from goverment Gulf of Mexico shrimpers, already a loss making industry, could, indeed, hang up their nets.

Here is the link to the article:

http://www.usatoday.com/money/industries/food/2009-04-08-quit-commercial-fishing_N.htm

VIETNAM: subidised loans for the fisheries industry

The Vietnam News Agency reported recently that the State Bank of Viet Nam has included fisheries as an one of the nine industry sectors eligible for the 4 per cent subsidised interest rate for middle-to-long-term dong loans as part of the Government’s second stimulus package yesterday.

The subsidy, which applied from last Sunday, will enjoy a maximum duration of two years from disbursement of loans approved immediately before and after April 1, 2009.

The subsidised interest is be available from April 1, 2009 to December 31, 2011.
Eligible organisations and individuals must use the money to invest in production and infrastructure development.

Here is the link to the press release:

http://vietnamnews.vnagency.com.vn/showarticle.php?num=06BUS090409

CHINA: fuel subsidies for fishermen

The Chinese authorities recently announced a fuel price subsidy mechanism intended to soften the impact of fuel price flare-ups on, a number of economic sectors, including the fishing industry.

In line with the newly enacted subsidy plan, when the state guideline price of petroleum exceeds RMB 4,400 (USD 644.22) per ton and that of diesel exceeds RMB 5,480 (USD 802.34) per ton, the mechanism will kick in.

The government will provide half the price difference between RMB 4,400 (USD 644.22) and prices of RMB 5,480 (USD 802.34) per ton for gasoline; for diesel, half the price difference between RMB 3,870 (USD 566.62) and RMB 5,070 (USD 742.31) per ton will be subsidized. For prices above RMB 5,480 (USD 802.34) for gasoline or RMB 5,070 (USD 742.31) for diesel fuel, the government will subsidize the entire price difference.

According to the press these subsidies are intended for “assisting farmers, the underprivileged, and the public utilities in easing the burden of high fuel prices.”

Here under are a few links articles on the Internet:

http://news.alibaba.com/article/detail/energy/100083727-1-china-sets-fuel-subsidy-formula.html

http://www.cctv.com/program/bizchina/20090410/108072.shtml

http://www.jlmpacificepoch.com/newsstories?id=145552_0_5_0_M

http://www.china.org.cn/business/2009-04/10/content_17585332.htm

AUSTRALIA: "ENMESHED - Australia and Southeast Asia's Fisheries"

Looking for literature on Asian fisheries I stumbled upon a very good paper written by Meryl J. Williams and published by the Lowy Institute for International Policy.

The title of the paper is "Enmeshed - Australia and Southeast Asia's Fisheries". It looks at the current situation in that part of the world (including Australia), it analyses how Australia is connected with the other countries in the region (Indonesia, Thailand, Vietnam, the Philippines, Papua New Guinea, Brunei Darussalam; Burma; Cambodia; East Timor; Malaysia and Singapore).

it is difficult to summarise the main findings but what I took from the paper is that cooperation in and proper implementation of, fisheries management is critical in harnessing issues that will affect all countries in the region, especially Australia. Among this "issues" (or, better said, challenges) the author identifies: illegal fishing, fish trade, fish stock sustainability and marine environmental conservation.

Yet, the thing that struck me most is that fisheries subsidies, let alone the words subsidy or subsidies, are not mentioned in the document. The only mention concerned subsidies for aquaculture in Vietnam. So one could deduct that subsidies do not afffect and/or would not affect the evolution of fisheries in the future in Southeast Asia. Such deduction would go against the widely held view that subsidies to fisheries, and especially some types of aid, can undermine the sustainable exploitation of fishery resources.

Given the fact that emerging economies will be the main palyers in fisheries in Southeast Asia (and elsewhere) susbidies will have to be regulated, in parallel to regulating fisheries, if fishery reources have to be preserved for future genrations.

I would like to end this comment by quoting the opening paragraph of the paper's Executive Summary:

"The training of diplomats, trade negotiators and supermarket executives in Australia and overseas usually does not cover the basics of fish and fishing, but maybe it should. In their careers, many will find themselves dealing with the challenges of illegal fishing, and other fish and fishing issues, such as fish trade, fish stock sustainability and marine environmental conservation. Nowhere is a fisheries education more pertinent than in Australia and Southeast Asia today."

The paper can be found at the follwing weblink:

http://www.lowyinstitute.org/Publication.asp?pid=714

RUSSIA: USD 600 million subsidies to develop the domestic fishing industry

According to the "The Moscow Times" the Rosselkhozbank (Russian Agricultural Bank) has set aside 20 billion rubles (USD 600 million) for the fishing industry in 2009.

I copy here under the full text of the article as it provides a lot of insight on Russia's actions and objectives when subsidising its fishing industry.

27 March 2009 By Jessica Bachman / The Moscow Times

Rosselkhozbank has set aside 20 billion rubles ($600 million) for the fishing industry this year, chairman Yury Trushin said Thursday. "We have reserved 20 billion rubles for fishermen this year. Come and get it," Trushin said at a meeting in Moscow on the development of the country's fishing industry, Interfax reported. Rosselkhozbank's charter capital was increased 73 percent in February to 106 billion rubles as part of the government's bank bailout plan.

Participants at Thursday's meeting, including First Deputy Minister Viktor Zubkov and representatives from the fishing industry, discussed anti-crisis proposals and the government's long- and short-term goals for strategic development of the fishing sector. This year, Russia has "undertaken a fairly ambitious plan" to harvest 3.65 million tons of fish and increase the share of domestic fish on the Russian market to 70 percent, said Zubkov, who oversees the agricultural sector for the government. In 2008, Russia harvested 11 percent less, or 3.3 million tons.

"For us to meet this target, it is necessary to develop favorable conditions for fulfilling domestic demand with Russian fish and to more actively tackle the issue of import substitution." Russia currently imports about 1.1 million tons of fish a year, close to one-third of its own catch. In major cities, imported fish and fish products occupy more than 50 percent of the market. Russia exports 1.3 million tons of fish, leaving only 60 percent of the catch for internal consumption.

Weaning Russia off its dependence on imported fish and other imported foodstuffs has become a pressing issue as a plummeting ruble has pushed up the price of imports.

To help the industry provide enough fish products to substitute the more expensive imports, the government's investment share in coastal infrastructure and fish processing equipment totals 14 billion rubles for 2009, 5 billion more than in 2008.

"To increase our production of fish products, we need to develop modern infrastructure that will facilitate the delivery, reprocessing, storage and transportation of the fish and its sale at acceptable prices," Zubkov said Thursday.

In its 1.6 trillion ruble ($48 billion) anti-crisis package, the government has called for provisions to ensure that fishing companies and producers continue to modernize and have access to credit lines.

Measures include the allocation of 1 billion rubles from the budget to subsidize interest rates on loans for the purchase of new vessels; equipment upgrades and the development of port infrastructure; tax incentives; and subsidies for transportation within Russia.

The Federal Fisheries Agency has already supplemented the government's measures with its own anti-crisis wish list, which will be put up for discussion next week when the government asks the State Duma to approve its plan.

The Moscow Times » Issue 4113 » Business

After reading the article my impression is that Russia, if a Member of the WTO, would have serious difficulties in accepting the prohibitions included in the draft negotiating text as proposed in November 2007 by the Chair of the WTO negotiating Group.

The article can be found at this location:

http://www.themoscowtimes.com/article/1009/42/375722.htm

MALDIVES: fuel subsidies package for fishermen in 2008

Last year the Maldives' Government Ministry of Fisheries launched a Maldives Rufiyaa (Rf.) 100 million (USD 7.8 million) fuel subsidy program aimed at those vessels registered with the ministry.

According to the fisheries ministry a sum of Rf.300, 000 (USD 23,400) are given out as fuel subsidy to fishing vessels of 85 feet in length and more. Vessels between 65 feet and 84 feet in length are given Rf.200,000 (USD 15,600) while vessels between 64 and 45 feet are given Rf.70,000 (USD 5,400). For vessels less than 45 feet in length a fuel subsidy of Rf.20,000 (USD 1,500) is given. According to the fiseries ministry some 1082 fishing vessels were registered in June 2008.

Government officials said that the programme had not resulted in an increase in fishing capacity, rather the usual number of vessels went out for fishing.

Hereunder is the link to a press article on the above subsidy programme:

http://www.maldiveschronicle.com/fishermen-not-increasing-despite-fuel-subsidies/

VENEZUELA: subsidies from government controlled banks

Insopesca or "Instituto Socialista de la Pesca y Acuiculture" (the Socialist Institute of Fishing and Aquiculture) announced in January 2009 that, during 2008, it got the support of public banking to grant financing for the fishing industry for the order of the Bolivar 900 million (USD 128 million).

These resources were intended for purchase of boats, engines, fishing gear, aquaculture and transport of fish.

According to Insopesca, these measures where taken in the context of the prohibition of the trawl fishing (for the protection of the ecosystem) and the "rescue" of the artisanal fishing sector, more in particular of "Programa Integral de Desarrollo Anual" or Pida (Integral Annual Development Programme).

The implementation of this programme resulted in the approval of credits by public banking for the delivery of more than 1.200 motors, 604 boats, 97 transport units, 1.230 units of fishing gear and the allocation of 284 hectares for the aquaculture.

The resources were distributed in their majority in methods of group credits and some few of an individual type.

The official press release (in Spanish) can be found here:

http://www.abn.info.ve/noticia.php?articulo=166123&lee=3

WTO: the G20 should ask the WTO to supervise fisheries subsidies

This is the proposal made in the "Global Economic Governance" blog by a number of authors.

Not a bad idea. This would be a very positive step in increasing the (desperately needed) transparency in fisheries subsidies.

As an additional suggestion I would strongly recommend that the supervision should include a public report to be issued by the WTO Secretariat.

Here is the link to post with the proposal.

http://www.globaleconomicgovernance.org/blog/2009/03/resist-us-protectionism-the-top-trade-priority-for-the-g20/