INDIA: artisanal fisheries and subsidies

As those familiar with the ongoing WTO fisheries subsidies negotiations know “artisanal fisheries” are one of the most contentious and debated issues in the negotiations.

Some WTO Members have been very vocal in asking for broad exemptions to the so called artisanal fisheries. In particular India (with the support of China and Indonesia) have been making submissions to ensure that what they consider as “artisanal” or small-scale or subsistence fisheries is not subject to any new rule on subsidies for the fisheries sector.

India’s submission (TN/RL/W/203 of 6 March 2006) sets out what artisanal fisheries should cover:

“Based on the broad elements that have been advanced by international rganizations such as FAO, the World Bank, Asian Development Bank and ICCAT and Members’ submissions thus far, India believes that the common characteristics for developing an understanding of small-scale, artisanal fisheries may be based on a recognition of the following:

• They are traditional fisheries involving fishing households or small groups of fishworkers.


• The fishing vessel could vary from gleaning or a one-man canoe to up to 20 m, including trawlers, seiners or long-liners.


• They use relatively small fishing vessels, which may be non-motorized or use small out board engines (say up to 10 bhp).


• The fishing is confined to close to the shoreline.


• Use of fishing gear such as beach seine and gill nets, hook and line, and traps.


• Use of labour-intensive technologies.


• Artisanal fisheries can be both subsistence or commercial, providing for local consumption or export as well.”

At the same time other WTO Members insist very much on the fact that “no blank check” should be given to developing countries in the name of “artisanal fisheries”. This has been was clearly stated by a number of countries, developed and developing, throughout the negotiations. As an illustration I quote from a submission by Australia, New Zealand and the U.S. tabled as a reaction to another submission by India, China and Indonesia.

“Developing countries have seen first hand how uncontrolled fishing in their coastal waters can lead to stock depletion and threats to livelihoods, and how subsidies have distorted production and trade patterns. Thus, there is general consensus that there should be no "blank check" to develop fisheries in a way that undermines their long-term sustainability.”

In another submission (TN/RL/W/234 of 17 July 2008) by Argentina, Chile, Colombia,Ecuador, Mexico and Peru also stated that flexibilites for developing countries in the context of Specal and Differential Treatment are not tantamount to a "blank check":

In Hong Kong, our Ministers recognized the importance of the fisheries sector for development priorities, poverty reduction, and livelihood and food security concerns. If well managed, fishing can continue to be a significant source of food and income for a large part of the population in developing countries, as well as an instrument for reorientation from less productive activities. That is why a central element of future disciplines will be the flexibilities given to developing countries to support fishing activities. However, scientific information on the status of marine resources and countries' own experiences in the exploitation of fishery resources show that such flexibility cannot be a blank cheque.

BLOG: features added to this blog

You will notice that the blog includes now a number of new “gadgets”.

To make the blog more lively there are now a couple of “feeds”. One is from the blog “WorldTradeLaw.net” and shows the five first headlines of its news page. The other new gadgets are feeds from international academic journals specialising in international trade issues.

CANADA: Parliament and subsidies negotiations at the WTO

The Standing Committee on Fisheries and Oceans of the Canadian House of Commons has conducted a number of hearings on the negotiations at the WTO regarding subsidies to the fishing industry.

Lawmakers heard evidence from Canadian negotiators, academia and from the Minister in charge of International Trade.

The hearings took place on June 10, March 6 and February 28 and 26 2008.

At the February 28 hearing the Committee invited Dr. Marc Bénitah, Professor, Université du Québec à Rimouski, an expert in international trade law, and Dr. Rashid Sumaila, Professor, University of British Columbia, who has published numerous works on fisheries subsidies.

Hereunder is the link to the webpage of the Standing Committee on Fisheries and Oceans with the hearings. Please note that for some of the hearings you can listen to the recorded version of the meeting:

http://www2.parl.gc.ca/committeebusiness/CommitteeMeetings.aspx?Cmte=FOPO&Language=E&Mode=1&Parl=39&Ses=2

CANADA : subsidies for lobster fishermen

Lobster fishermen in Prince Edward Island are facing very depressed prices for their produce. The situation is so serious that politicians in that Canadian province, but also at federal level, are scrambling to help fishermen wheather the storm.

According to the Canadian media the plan, worked out by the Province government looks as follows:

- Province will buy surplus canners (lobster one pound and under) for storage and later sale.
- Province will extend low-interest loan plan.
- Joint federal-provincial marketing promotion worth CAD 4 million (USD 3.5 million).
- Changes to Employment Insurance rules.
- Reduction in number of lobster licences by way of a buy-back programme.

The Provincial authorities are putting CAD 8 million (USD 7 million) into the plan, but it needs agreement from the federal government for changes to the Employment Insurance program for fishermen, to allow buyback of lobster licences and take part in a jointly funded marketing promotion.

Here is the link to the CBC's website giving the news:

http://www.cbc.ca/canada/prince-edward-island/story/2009/05/14/pei-lobster-plan.html

Interesting to note is that the Federal Fisheries Minister, Ms Gail Shea, was very reluctant to provide federal support to lobster fishermen ("no federal price subsidies, no federal buying of lobster"). She was also quoted as saying that "providing Maritimes lobster fishermen with subsidies in this time of low prices would violate Canada's trade agreement with the United States".

And the links on Minister Shea's statements:

http://www.cbc.ca/canada/prince-edward-island/story/2009/05/06/pei-lobster-shea.html

http://www.cbc.ca/canada/new-brunswick/story/2009/05/17/nb-lobster-crisis.html

WTO: Director General Pascal Lamy on Fisheries Subsidies (4) in New Zealand!

Here is an extract from another speech that Director General Lamy gave in New Zealand (the champion of the "Friends of Fish"). Fisheries subsdies could not possibly be left out, as one of the main reason to conclude the Doha Round.

As an island nation with important marine resources, New Zealand is very active in working for stronger disciplines on fisheries subsidies, an area where economic and environmental concerns can be clearly complementary. Here too the WTO negotiations provide the only effective means of securing legally enforceable international agreement. This is another important New Zealand -and global — interest that would be threatened by failure to conclude the Round.

The speech was delivered on 6 March 2009 to the Auckland Chamber of Commerce. Also note that the extract concerns the "prepared text" as mentioned in the WTO website. Here is the link to the text:

http://www.wto.org/english/news_e/sppl_e/sppl120_e.htm

WTO: fisheries subsidies negotiations at the 2009 Forum of the North American Association of Fisheries Economists (2)

Going once more through the programme of this conference I noticed that another session of the conference included a presentation of a paper related to fisheries subsidies.


Here is the session:

Wednesday, May 20 10:30 am – 11:30 am
Bioeconomic Modeling II
Chair: Emi Uchida
Patricia Arceo and Bianka Perez-Saavedra, Effects of Subsidies in the Multispecies Fisheries off Veracruz, México: a Conceptual Model
Naomi Foley, Viktoria Kahui and Claire Armstrong, The Production Function Approach – Estimating Linkages between Redfish and Cold Water Coral on the Norwegian Coast
Monica Galligan, A Computable General Equilibrium Model to Illustrate Economic Effects Of Fishery Conservation and Management Measures
Min-Yang Lee and Richard Brazee, The Effects of Rigidity and Limited Information on Optimal Fisheries Policy

NORWAY: still more subsidies for (cod?) fishermen

In what seems to be a subsidy spree, the Norwegian Fisheries and Coastal Affairs Minister, Ms Helga Pedersen, announced on 15 May 2009 an additional subsidy of NOK 19 million (USD 3 million) for the transport and the marketing of Norwegian fish products.

It appears that this move has been promted by the very bad situation of the market for cod products in Norway.

The official press release can be found here:

http://www.regjeringen.no/nb/dep/fkd/pressesenter/pressemeldinger/2009/19-millioner-til-foringstilskudd-og-mark.html?id=561949

WTO: fisheries subsidies negotiations at the 2009 Forum of the North American Association of Fisheries Economists

You have noticed that one of the economist's associations with a link in my blog is NAAFE, the North American Association of Fisheries Economists.

This association will be holding its fifth biennal forum from 17 to May 2009 in Newport, Rhode Island.

One of the special sessions will be devoted to the ongoing negotiations on fisheries subsidies at the WTO. Courtney Sakai, from Oceana, will chair the session. Here is the detail:

Tuesday, May 19, 3:30 pm – 5:00 pm:
Special Session: Key Questions on the Road to a WTO agreement
Chair: Courtney Sakai
Introduction describing the current state of talks on fisheries subsidies at the WTO, including the issues and questions raised by the WTO Chair. Panelists will discuss their recent work and respond to these issues and questions.
Courtney Sakai, Senior Campaign Director, Oceana
Leslie Delagran, Economist, Oceana
Anthony Cox, Senior Economist, Fisheries Policy Division, OECD
Rashid Sumaila, Director of the Fisheries Economics Research Unit, Fisheries Centre, University of British Columbia
Anthony Charles, St. Mary’s University, Halifax


Here is the link to the conference:

http://www.uri.edu/meeturi/naafe/index.html

NORWAY: government guarantees for credits to the fishing indusry

In a previous post (2 February 2009) I was referring to the fund that the Norwegian government had set-up through "Innovasjon Norge" to guarantee "first hand" sales of fish.

Now the Fisheries Minister, Ms Pedersen, is proposing to allocate between NOK 135 and 190 million to guarantee credits granted to individual companies in the fishing industry.

Here is the link to the official press release:

http://www.regjeringen.no/nb/dep/fkd/pressesenter/pressemeldinger/2009/forslag-om-garantiar-for-driftskreditt-t.html?id=560311

NORWAY: communal subsidies to aquaculture

Fish famers in North Norway are experiencing difficulties in getting the money needed to purchase licenses for farming salmon. The price for such a license is NOK 8 million, except in Finmark , where the price for a license is NOK 3 million (see my post of 30 November 2009).

In the commune of Ballanagen, the local authorities have decide to grant a “soft loan” (interest free) amounting to NOK 400.000 to Ballangen Sjøfarm. The reimbursement of the loan will start after two years after the payment to Ballangen Sjøfarm with 5 years to effect the reimbursement.

Here is a link to a press article on this (in Norwegian):

http://www.fremover.no/lokale_nyheter/article4270381.ece

USA: more subsidies for catfish farmers

The U.S. press is reporting about stimulus and recovery funds being provided to the embattled U.S. catfish fish farmers.

In the framework the American Recovery and Reinvestment Act of 2009, USD 50 million has been earmarked to subsidise aquaculture. Baitfish growers and catfish farmers are eligible if their 2008 feed costs were at least 25 percent of their total operating cost. They also are eligible if their feed costs are 25 percent above the average cost of feed from 2003-2007.

Here is a link to an article in the "Arkansas News":

http://arkansasnews.com/2009/05/06/stimulus-money-available-for-catfish-industry/

And here is a link to the Act (see Sec. 102. Agricultural Disaster Assistance Transition. (d) 2008 Aquaculture Assistance):

http://en.wikisource.org/wiki/American_Recovery_and_Reinvestment_Act_of_2009/Division_A/Title_I

WTO: Director General Pascal Lamy on Fisheries Subsidies (3)

Fisheries subsidies is becoming of the preferred marketing tools to promote the Doha Round. Director General Lamy is of those that mentions this negotiating subject as one of the main reasons why the Doha Round deserves to be concluded.

I copy here an extract of his speech, delivered to the Peterson Institute for International Economics in Washington D.C. on 24 April 2009.

"Let me be very frank with you: I have been puzzled by such comments. But many WTO members have been angered.

Take the African cotton producers who are awaiting the conclusion of the Doha Round to see cuts in trade distorting cotton subsidies. Or those who are awaiting the elimination of current export subsidies on dairy.

Take also the negotiations on climate-friendly goods and services which is part of the Doha Round. Here is a chapter with a huge economic but also job creating potential. The Obama administration has committed itself to reducing US greenhouse gas emissions and to making the United States a leader on climate change. A successful Doha Round could deliver a package of open markets for environmental goods and services. A more open trade in this sector will increase the availability, and lower the cost, of climate-friendly goods, services and technologies. This outcome would complement a much-needed climate change agreement at Copenhagen later this year.

Take also fishery subsidies where the Doha Round could create the first international agreement aimed at reducing wasteful government support for activities that deplete the world’s oceans of one of its vital resources.

Not to mention regional trade agreements or rules of origin, already there since the Tokyo Round, which are part of the Doha menu and which are often quoted by economic operators as necessitating clearer WTO rules."

What I miss in this speech is a reference to the fact that a number of WTO Members, albeit for different reasons, consider that new rules on anti-dumping (a subject under the "Rules" chapter) are also a key negotiating issue in the ongoing round.

Here are the links with Mr Lamy's speech:

http://www.wto.org/english/news_e/sppl_e/sppl122_e.htm

http://www.iie.com/events/event_detail.cfm?EventID=113

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/