WTO: fisheries subsidies and Hollywood under the same roof

Readers of my blog will have noticed that a number of NGOs are in close competition as regards the visibility that fisheries subsidies negotations can give to their action in ocean's related issues.

This time it was OCEANA the one that stole the show, literally !!

According to a press release by OCEANA, relayed by some media, Hollywood actor Ted Danson, visited Geneva on 29 October 2009 and met diplomats who are involved in the ongoing negotiations on fisheries subsidies.

I was struck by one of the comments that Mr Danson made while being interviewed in Geneva.

"You are subsidizing the boats to do exactly the wrong thing," Danson said at the WTO's Geneva headquarters. "One of the fastest ways to deal with this problem, is to take boats off the water. If you cut subsidies, you are going to cut their ability to do the wrong thing."

So, you could interprete Mr Danson's statement, in particular "One of the fastest ways to deal with this problem [of overfishing], is to take boats off the water" as meaning that the best thing is to stop fishing altogether.

The other interpretation, perhaps closer to Mr Danson's true intentions is that you can give subsidies to fishermen to take boats off the water. I am sure Mr Danson would agree exempting subsidies for the scrapping of fishing vessels.

When looking into Mr Danson's filmography I found that he played in the movie "Saving Private Ryian". Well we could invite him to play in the movie "Saving fisheries subsidies negotia tions". Though in this latter movie the enemy to be defeated is not the German army but a very obscure beast called "anti-dumping negotiations" which is also active in the "Rules" battlefield. Mr Danson could advise embattled negotiators that "zeroing" on the beast, so as to kill it quickly, could be a decisive move in saving fisheries subsidies negotiations.

Here is the link to the press release by OCEANA and the article by the Associated Press with the interview to Mr Danson.

http://na.oceana.org/en/news-media/press-center/press-releases/trade-policy-essential-to-sustainable-seafood-movement

http://www.google.com/hostednews/ap/article/ALeqM5i-h8fo0AE4NbiXYroLPbnnGGF2EAD9BKS8601

WTO: fisheries subsidies and fisheries management

A week ago I was discussing how some NGOs and international bodies had published in their websites information about the informal meetings of the WTO Rules Negotiating Group. According to the information published by FFA the next informal meeting will take place on 29 and 30 October 2009 and will cover Article V (Fisheries Management) of the Chair's Draft negotiating text (document TN/RL/W/213 of 30.11.07)

Readers may remember that the discussions at the recent meetings, as reported by the above organisations, take place on the basis of a "Roadmap" that the Chair of the Group, Ambassador Valles (Uruguay) submitted to WTO Members in December 2008 (document TN/RL/W/236 of 19.12.08).

I copy hereunder the questions that the "Roadmap" addresses to WTO negotiators on this article. At the end of the post the reader will find the full text of Article V.

FISHERIES MANAGEMENT CONDITIONALITIES

17. The discussions in the Negotiating Group indicate that participants generally believe that exceptions – both general and S&D – should not be unconditional, given their potential to undercut the effectiveness of the disciplines on subsidies that contribute to overcapacity and overfishing.

 18. The discussions also have indicated a widely-shared view that the principal conditionalities should pertain to fisheries management, a central component of which would be stock assessments, in part because of the difficulties of directly measuring the effect of particular subsidies on particular wild capture fisheries due to the mobile and undomesticated nature of the resource.

 19. There are, however, differing views as to how much detail WTO fisheries subsidies rules should contain on fisheries management, in respect of both the substantive basis of such conditionalities and the appropriate fora and mechanisms for monitoring and enforcing their implementation. There has been considerable debate on the approach taken to these issues in my first draft text.

 

20. I would ask participants to reflect on the following questions:


(a) Are there other conditionalities that should be applicable to exceptions (general and S&D), either in addition to or instead of fisheries management conditionalities?

 (b) How important is it for the effective operation of the disciplines that all Members' fisheries management systems and measures adhere to a common standard, and how prescriptive should that standard be?

(c) If a common standard is not necessary or not acceptable, how could the effectiveness of different Members' systems in controlling overcapacity and overfishing be monitored and enforced?

• - What would prevent one Member with ineffective management from overfishing stocks that were safeguarded/replenished by another Member's effective management measures?

d) Given that an international consensus already exists in respect of a substantial number of international fisheries management instruments, and those instruments themselves take account of the capacity constraints of developing countries, does it make sense to draw inspiration from those instruments for the substantive content of management conditionalities for using exceptions from the prohibition?

• (i) If not, why not?
• (ii) If so, how could the typically non-binding nature and relatively general and flexible wording of those instruments be reconciled with a binding prohibition of subsidies that contribute to overcapacity or overfishing, and binding conditionalities concerning fisheries management where exceptions are used?

(e) What role should stock assessments play in any management conditionalities?

• (i) If stock assessments are considered unnecessary, why, and how could overfishing and overcapacity be monitored in the absence of stock assessments?
• (ii) If stock assessments are considered to be a necessary element, how could the rules take into account Members' different capabilities while ensuring that the assessments are as reliable and robust as possible?
• (iii) To what extent if at all should the results of stock assessments form part of any conditionalities?

(f) Is it logical to require a stock assessment before a capacity-enhancing subsidy is provided?

• (i) If not, why not?
• (ii) If so, what practical problems would need to be resolved?
• (iii) What timing and review mechanism for such stock assessments could best reconcile a Member's need to implement a given subsidy on the one hand, and other Members' need for multilateral surveillance/transparency in respect of the fisheries resources that would be affected by it on the other hand?

(g) Given the existing role of the FAO in discussing FAO members' substantive implementation of various international fisheries instruments, what specific problems/concerns would there be if that role were enhanced in respect of stock assessments and/or fisheries management systems?

• - Would the problems be the same if the review at the FAO were similar to reviews of notifications by WTO bodies (i.e., multilateral review among members, for transparency, rather than a mechanism for approval, whether by a panel of experts or a multilateral body)?

(h) Why, if at all, would the WTO be better-positioned to perform such reviews of fisheries-related information?

• - How could the necessary expertise be built into any WTO-based review of fisheries management, without the WTO becoming a fisheries management organization?

Article V Fisheries Management

Any Member granting or maintaining any subsidy as referred to in Article II or Article III.2(b) shall operate a fisheries management system regulating marine wild capture fishing within its jurisdiction, designed to prevent overfishing. Such management system shall be based on internationally-recognized best practices for fisheries management and conservation as reflected in the relevant provisions of international instruments aimed at ensuring the sustainable use and conservation of marine species, such as, inter alia, the Fish Stocks Agreement, the Code of Conduct, the Compliance Agreement, technical guidelines and plans of action (including criteria and precautionary reference points) for the implementation of these instruments, or other related or successor instruments. The system shall include regular science-based stock assessment, as well as capacity and effort management measures, including harvesting licences or fees; vessel registries; establishment and allocation of fishing rights, or allocation of exclusive quotas to vessels, individuals and/or groups, and related enforcement mechanisms; species-specific quotas, seasons and other stock management measures; vessel monitoring which could include electronic tracking and on-board observers; systems for reporting in a timely and reliable manner to the competent national authorities and relevant international organizations data on effort, catch and discards in sufficient detail to allow sound analysis; and research and other measures related to conservation and stock maintenance and replenishment. To this end, the Member shall adopt and implement pertinent domestic legislation and administrative or judicial enforcement mechanisms. It is desirable that such fisheries management systems be based on limited access privileges . Information as to the nature and operation of these systems, including the results of the stock assessments performed, shall be notified to the relevant body of the FAO, where it shall be subject to peer review prior to the granting of the subsidy . References for such legislation and mechanism, including for any modifications thereto, shall be notified to the Committee on Subsidies and Countervailing Measures ("the Committee") pursuant to the provisions of Article VI.4.

V.2 Each Member shall maintain an enquiry point to answer all reasonable enquiries from other Members and from interested parties in other Members concerning its fisheries management system, including measures in place to address fishing capacity and fishing effort, and the biological status of the fisheries in question. Each Member shall notify to the Committee contact information for this enquiry point.

WTO: more on "farmland agreements"

Doing some desk research on this issue of "farmland agreeemnts" I fell upon a webpage at the Wilson Institute, Woodrow Wilson International Center for Scholars (Washington, USA)  reporting on a panel discussion on the subject of  "Land Grab: The Race for the World's Farmland".

Here is the link to the aforementioned web page:

http://www.wilsoncenter.org/index.cfm?fuseaction=news.item&news_id=532332#

WTO: after fisheries agreements, "farmland agreements"?

In my post of 26/08/2009 I referred to fisheries agreements as one of the "hot issues" at the WTO DDA negotiations on fisheries subsidies.

Now it seems that governments are negotiating bilateral agreements with a view to secure farmland to the farmers of one of the Parties or to guarantee food supplies to the population of one of the countries.

An example of the first type of farmland agreements is the one recently concluded between South Africa and the Republic of Congo whereby Congo will give South African farmers access to up to 10 million hectares of farmland.

Here is a link to an article on this:

http://www.iol.co.za/index.php?set_id=1&click_id=6&art_id=nw20091020221302711C267231

And here the link to a website covering this type of agreements:

http://farmlandgrab.org/

Should this types of agreements be covered by new WTO subsidy disciplines?

NORWAY: fisheries subsidies in political parties' manifestos. Part II the Christian Democratic Party

I started a few posts ago with a series on the manifestos of the Norwegian political parties as posted in their websites, in the run-up to the elections in mid-September of this year.

Today I will discuss the manifesto of the Kristelike Folkeparti (Krf).

This party was not in office in the previous government and will continue in the opposition for the next four years. Interesting to note is that the Prime Minister of the government in power from 2001 to 2005, Mr Bondevik, was the leader of this party.

Here are some of the promises made by Krf prior the election:

- keep ownership Norway's fisheries and aquaculture industries in Norwegian hands.

- give increased weight to local employment when allocating fishing quota.

- maintain the obligation to supply (leveringsplikt) to encourage local processing. The non-respect of the supply obligation should have consequences for the subsequent allocation of fishing quota.

- increase the harvest of pinnipeds (seals) and work towards international acceptance of of this harvest, within ecological sustainability.

With regard to the regulatory framework Krf wants to maintain the main pillars upon which rests the Norwegian fishing industry, the Participants law (Deltakerlov) and the Raw fish law (Råfisklov).

On pinnipeds (seals) the Krf considers that, because a large population of pinnipeds is tantamount to a large consumption of fish, a higher harvest of seals and pinnipeds is necessary.

Here is the link to the manifesto (section on fisheries and aquaculture):

http://www.krf.no/ikbViewer/page/krf/politikk/politisk-program/artikkel?p_document_id=23039

CHINA: strategic importance of fisheries (and subsidies?)

In my previous posts I have been citing China as one of those WTO members that would like to have a broad margin of manoeuvre to grant subsidies to its fishing (and aquaculture industry). Actually China’s very first written submission to a WTO Negotiating Group was about fisheries subsidies (TN/RL/W/9 of 20 June 2002).

During summer time of this year I read an article published by the Jamestown Foundation and titled “Strategic Implications of Chinese Fisheries Development”.

I will quote two paragraphs of this article, which I found very informative:

“To mollify angry fishermen, the Chinese authorities have offered substantial subsidies to displaced fishermen and also supported aquaculture as a viable economic alternative to marine fisheries. Indeed, the aquaculture sector has witnessed enormous growth in China during the last decade.“

 “Yet, Chinese fishing fleets’ activities are much more than a regional issue.  Although China’s distant water fishing (DWF) fleet was only created in the mid-1980s, by 2006 it has grown to nearly 2,000 vessels operating on the high seas and in the EEZs of 35 countries [12].  The Chinese DWF fleet is actually supported by subsidies from the central government as part of an effort to divert Chinese fishermen out of local waters that have been fished out.  For instance, according to an authoritative source, the number of Chinese fishing vessels in West African waters at any one time could be close to 300 vessels at any given time [13].”

12. Guifang (Julia) Xue, “China’s Distant Water Fisheries and Its Response to Flag State Responsibilities,” Marine Policy 30 (2006), p. 653.

13. Wang Ning (ed.), Handbook on Long-Distance Fishing Technology and Economy (Beijing:  Ocean Press, 2002), p. 74.

The full reference of the article is the following:

Lyle Goldstein , “Strategic Implications of Chinese Fisheries Development” China Brief, Volume: 9 Issue: 16 (August 2009)  The Jamestown Foundation, Washington.

http://www.jamestown.org/single/?no_cache=1&tx_ttnews[tt_news]=35372

WTO: developing countries divided over the issue of exemptions to subsidy disciplines

In my previous post I was referring to the discussions, as reported by ICSTD and FFA, on the "Roadmap" issued by the Chair in December 2008. Apparently, the main subject discussed was Special and Differential Treatment (S&DT) for Developing Members (Article III of the Chair's 2007 draft text) and General Disciplines (Article IV).

Readers familiar with the ongoing WTO DDA (Doha Development Agenda) negotiations will have noticed that S&DT is a very difficult subject of negotiation. Among the main reasons why it is so difficult to debate S&DT we find the exceptions from the general rules that can be granted to developing countries. Fisheries subsidies negotiations are no exception to such difficulties, the more that benefiting from S&DT provisions could mean exemptions from certain rules, in particular from the prohibition to provide some subsidies.

If you have followed my posts on the WTO negotiations you would have noticed that developing countries can be divided into two coalitions, I will call them Group A and Group B:

- Group A: gravitates around the so called "Friends of fish" group. These developing countries are of the view that S&DT should be limited and subject to to very specific conditions (e.g. measurable parameters such as boat length, area of fishing operations, etc.). A key issue for these countries is to have a definition of artisanal fisheries. Among the countries that belong to this coalition we can cite: Chile, Peru, Pakistan, Colombia and Argentina.

- Group B: would like to obtain the broadest possible exemptions from a ban on fisheries subsidies. This group opposes the use of "rigid parameters" to limit the possibility of benefiting from such exemptions. Developing WTO members of that can be included in this coalition are: India, China, Indonesia. They have been joined lately by Mexico, Ecuador and Brazil.

If we look a little bit closer into the membership of the above coalitions we will notice that in Group A we find, broadly speaking, two types of developing countries. "Type 1" are characterised by the fact that they have the means to provide support to their fishing industry, yet because of "policy" reasons they do not want to be seen as "subsidisers". A clear example of this type of developing country is Chile. "Type 2" are countries that have limited means to support their industry and that are very keen to avoid that other developing countries (competitors) start massively subsidising their fishing industry. Argentina could and Peru could be counted as corresponding to "Type 2" of countries.

Both types (1 and 2) of countries in Group A have though one thing in common and that is that they want to keep in check their fellow (competing) developing countries from opening the money tap in a way that could affect their own competitiveness.

The membership of Group B is a more homogeneous one. To start with they are countries that have the financial muscle to assist their fishing industry and, perhaps more important, their policies are geared towards an expansion of their industrial base in many sectors, including fisheries. Another characteristic, although not common to all of the countries in Group B is the existence of a very large group of small scale fishermen (India, China and Indonesia).

 I found also fascinating how that this latest split in the developing countries, i.e. Brazil, Mexico and Ecuador joining China (or Group B) has resulted in neighbouring countries going apart: Peru in Group A, Ecuador in Group B, Argentina in Group A, Brazil in Group B. I do not think that this is a coincidence. These "pairs" of countries are fishing nations and,for some fish especies,direct competitors in world markets.

To conclude this post i will copy hereunder how the ICTSD and the FFA pictured the split among developing countries:

FFA:

"Interestingly, in the past, Brazil has been a "friend" of the 'Friends of Fish', but appears to have broken away from the group on the issue of S&DT, delivering a separate joint statement with China, Ecuador and Mexico."

ICTSD:

"Despite the differences among the statements, at least one official was struck by the similarities across the countries and groupings. All of those present agreed on the dual importance of curtailing overfishing and ensuring that developing countries have access to adequate flexibilities, the delegate said."

Personally I think that the ICTSD assessment is perhaps somewhat optimistic.

According to FFA the next meeting is scheduled for 29-30 October and will cover Fisheries Management (Article V).

WTO: reporting on informal negotiating meetings at the WTO

According to two organisations (ICTSD and Fisheries Forum Agency) the WTO Negotiating Group on Rules met on 24 and 25 September 2009 in the so called "informal mode".

The ICTSD reported in its "Bridges Weekly Trade News Digest" (Vol. 13,  Number 33 of 30/09/2009) that the Group met to continue the discussion on what the Chairman of the negotiating group had labelled the "Roadmap". This "Roadmap" is in fact a rather long questionnaire which, according to the Chair, "[...] identifies the key questions that we need to address in order to reconcile the approaches and advance our work in this area. [...]" (WTO document TN/RL/W/236, p. 2). I wrote a post on 21/12/2008 following the publication of the "Roadmap".

Before commenting (I will do it in a separate post) on what the ICTSD and the Fisheries Forum Agency reported about the discussions at the meeting, I would like to ask readers whether they have found somewhere written records of these so called "informal meetings" on fisheries subsidies negotiations. Personally I tried to find these meetings in the "Official programme of meetings" that is published in the WTO's official website but with no result.

So, these two organisations, ICTSD and the Fisheries Forum Agency appear to have sources that provide them with information on the above meetings, including the contents of the discussions.

Here is the link to the reports by ICTSD:
 
http://ictsd.net/i/news/bridgesweekly/56315/
 
And here the link to the FFA FISHERIES TRADE NEWS : Volume 2: Issue 9 of September 2009 with a report on the same meeting:
 
http://www.ffa.int/node/273

WTO: fisheries subsidies negotiations, a model for WTO "energy subsidies" disciplines?

A search on the Internet with the words "fisheries subsidies" can yield most interesting results.

A few days ago I stumbled upon the following article:

Bigdeli, S. Z. (2008). Will the «Friends of Climate» emerge in the WTO? The prospects of applying the «fisheries subsidies» model to energy subsidies. CCLR The Carbon and Climate Law Review, pages 78–88.

I will also copy hereunder the abstract of this article, so that readers can have an idea of what the author is suggesting:

Notwithstanding the potential virtues of subsidies in certain circumstances, this form of government intervention in markets mainly through financial or fiscal means may have huge negative impacts in addition to the effects on efficiency and trade. Fish stock depletion and man-made global warming are two examples of cases in which a subsidy could have detrimental effects on the environment. The fisheries subsidies case has found its way to the WTO in a constructive and promising manner. Following similar approaches to address the issue of energy subsidies, however, may pose challenges of the highest magnitude, as will be discussed in this paper.

So, an interesting subject for further research. I think it is worthwile to read the full article. I have put it on my priority list. When read I will share with you my thoughts on the content.

CHILE: subsidies for the salmon farming sector

Even if the titled of this blog is fisheries subsidies the readers will have noticed that, from time to time, posts appear on subsidies granted to the aquaculture sector.

Needless to say that fisheries and aquaculture have cross-linkages. These linkages may be weaker or stronger depending on a number of factors, e.g. the famed species. The nature of the linkages may also differ, in some cases it is through the environment that the linkage exists (e.g. fishing down the food chain to produce fish feed, escapes of farmed fish, etc.) in other cases the linkages might be of through the market (e.g. famed species competing with wild catch species).

Now, after with this introduction, let’s have a look at the subsidies provided by the Chilean government to the salmon farming industry, the second world’s largest producer of salmon after Norway. This industry suffered a major set-back in 2009 because of the outbreak of Infectious Salmon Anemia (ISA).

To help companies survive the crisis the Chilean government is providing through an agency called CORFO (Corporación de Fomento de la Producción), the Chilean Economic Development Agency, government backed guarantees to banks so that they can loan funds to companies in the salmon farming industry.

According to the information published in CORFO’s website the government is providing guarantees up to USD 8 million per company (producers or suppliers). The trade press has mentioned that around USD 400 million in guarantees will be available.

Here is the link to COFO’s website with the information (in Spanish) on the above guarantees:

http://www.corfo.cl/lineas_de_apoyo/programas/cobertura_para_el_cluster_del_salmon

Here is an article of the Diario Financiero on the subject:

http://www.df.cl/portal2/content/df/ediciones/20090805/cont_118516.html

NORWAY: millions of krona available for fishermen in North Norway (Finmark)

The Finmark County Authority announced last month (8 September 2009) that it had already granted NOK 18.1 million (USD 3.2 million) loans to fishermen from the Finmark’s County Authority Recruitment Fund for Fishermen. The Fund was created in October 2008 with a capital of NOK 38.4 million (USD 6.8 million). It has already handled 34 requests in 2009.

According to the information published in the County Council’s website, the funds are intended for fishermen who are betting on new recruitment and will invest in fishing vessels and quotas.

The loans are granted for an amount ranging from NOK 200,000 to NOK 1.5 million (USD 36,000 to USD 266,000), though it can not be higher than 25 percent of the investment in a single company. The loans are granted with a up to five-year interest-only period and an interest rate that is a percentage of Norges Bank's key rate.

Here is the link to the webpage with the announcement:

http://www.ffk.no/21136.aspx

NORWAY: extension of state backed credit guarantee to buyers and processors of fish

In my posts of 2 February 2009 and 10 May 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 outgoing fisheries minister Ms Helga Pedersen has proposed to the Norwegian Parliament (Stortinget) to amend the previous legislation to provide a up to NOK 250 million (USD 43 million) government backed loans to the fishing industry in 2009.

It is also proposed to expand the scope of the of the existing credit guarantee scheme with an amount of NOK 97.5 million (USD 16.8 million) so that the loans can be now granted to fish buyers, without an obligation to replenish stocks of raw material.

The government is concerned that parts of the fishing industry, in particular the processing sector, will not have sufficient liquidity to buy raw materials (cod) as the 2010 cod fishing starts. According to the Norwegian government “This could provide unacceptable consequences for the fishermen and some coastal communities that depend on the cod fishery”.

Here is the link to the government’s announcement (in Norwegian):

http://www.regjeringen.no/nb/dep/fkd/pressesenter/pressemeldinger/2009/forslag-om-ny-likviditetslaneordning-for.html?id=578180

NORWAY: subsidies for "extermination" fishing of king crab

The outgoing minister for Fisheries and Coastal Affairs, Ms Helga Pedersen has decided to set aside NOK 5 million for "extermination" fishing of king crab. The fishing will be organized by chartering vessels that will carry out a targeted fishing of this species.

According the the official press release the measure is intended to limit the spread of this alien species and the chartered vessels will be fishing for crabs with little commercial value.

Here is the link to the official press release (in Norwegian):

http://www.regjeringen.no/nb/dep/fkd/pressesenter/pressemeldinger/2009/utrydningsfiske-av-kongekrabbe.html?id=578754

USA: More disaster relief subsidies for US fishermen.

On 21 September 2009 the State of Massachusetts announced the distribution of USD 1.2 million in federal disaster assistance to 260 Massachusetts commercial shell-fishermen who lost income due to red tide-related shellfish area closures in 2008.

These federal funds were already allocated by NOAA’s Fisheries Service in November of 2008 after the Commerce Secretary determined a "commercial fishery failure" but the effective distribution of the money was could only happen after the National Marine Fisheries Service had the “2009 Massachusetts Red Tide Technical Assistance and Disaster Relief Proposal.”. Such approval took place on 14 May 2009 and on 18 September cheques started to be delivered to the affected fishermen.

In the press release of the Massachusetts' Executive Office of Energy and Environmental Affairs U.S. Representative Bill Delahunt (D-MA) was quoted as stating:

“The health of New England’s shellfish industry is vital to the economic health of our coastal communities"

In addition to Massachusetts, two other States, Main (USD 2 million) and New Hampshire (USD 1 million) are eligible for disaster relief.

The above aid seems to be fully in line with what the US has proposed at the WTO in terms of subsidies fully exempted from prohibitions. In its negotiating proposal TN/RL/GEN/145 of 22 March 2007 (p. 5) the US proposed to exempt from the prohibitions "the replacement of fishing capacity following a natural disaster where fleet capacity has been reduced, provided that capacity is not restored beyond its pre-disaster state;"

I do not know the exact details of the “2009 Massachusetts Red Tide Technical Assistance and Disaster Relief Proposal" but I have seen nothing that would prevent fishermen from rebuilding fishing capacity up to the pre-disaster levels.

Another interesting feature of the Massachusetts implementation of the relief programme is that, "[…] remaining funding will be allocated to a health insurance subsidy program to be subcontracted to the Massachusetts Fisherman’s Partnership, as stipulated in the federally-approved disaster relief proposal."

As a final comment on this subsidy announcement I would like to draw the attention of the reader to the importance that U.S. politicians attach to fisheries as being vital to the economic health of coastal communities. (see above statement by Bill Delahunt).

Here is the link to the press release of the Massachusetts' Executive Office of Energy and Environmental Affairs:

http://www.mass.gov/?pageID=eoeeapressrelease&L=1&L0=Home&sid=Eoeea&b=pressrelease&f=090921_pr_red_tide&csid=Eoeea

Here the 2008 announcement by NOAA of the allocation of federal disaster relief:

http://www.nmfs.noaa.gov/mediacenter/docs/new_england_red_tide.pdf

And here an article in the online edition of CapeCodToday:

http://www.capecodtoday.com/blogs/index.php/2009/09/21/1-2-million-in-disaster-relief-to-be-dis?blog=53

NORWAY: fisheries subsidies in political parties' manifestos. Part I the Centre Party

On 14 September 2009 general elections took place in Norway. It is likely that the left wing coalition in power before the elections will stay and govern for the next four years.

I write "likely" on intent because one of the parties, the Socialist Left Party (Sosialistisk Venstreparti or SV), has pledged to voters that it would oppose the opening of the fishing grounds around the Lofoten and the Vesterålen islands for the exploitation of oil. At the time of writing this post negotiations among the concerned parties (Ap, SV and Sp) for the continuation of the coalition are still ongoing.

Fisheries, even though of very modest importance when compared to other economic sectors (e.g. energy) is still an importance constituency for most political parties in this country.

I went through the election programmes of some of the main parties looking for their pledges in fisheries and aquaculture. I must confess that it was a fishing (for subsidies!) expedition. Here is the catch for the Senterpartiet (Sp). This party, with farmers as its main constituency, participated in the previous government. These are some of the proposals

• With the help of increased "economic means" stimulate the growth in harvests and catches of populations of seals and whales so that stocks of edible fish can grow and pay due consideration to Norwegian hunting traditions and hunting environment.
  

As my translation might not reflect all the nuances of the Norwegian origional I copy here the Norwegian text:

"Gjennom økte økonomiske virkemidler stimulere til økt høsting og fangst på bestandene av sel og hval, for igjen å kunne øke bestandene av matfisk og ta vare på norske fangsttradisjoner og fangstmiljø."

• Uphold the "Råfiskloven" (whereby fishermen's sales organisations act as monopolies for the first sale of some fish species, see my post of 26 June 2009 "NORWAY: sales monopolies - supporting fishermen without subsidies?") and the "Deltakerloven" "Particpants law"),
  
  Ensure a decentralised landing structure through the allocation of budgetary resources to the "Transport Regulation" and to landing sites where there is no other alternative to land [or deliver].

On aquaculture the Senterpartiet is proposing to:

• Establish a compensation mechanism for the cleaning and restoration of sites where serious (fish)illness has occurred. The cost of the compensation would have to be shared among, stakeholders, the state and insurance companies.

And concerning the strengthening of the competitiveness of the fishing industry:

• Abolish the yearly fee for the fishing vessels' register and the yearly fee to be paid by aquaculture companies to local authorities.
  
  Oppose the introduction of a "control fee" for the fishery and aquaculture sectors.

The above proposals are noteworthy.

First of all the one related to encouraging, with the help of economic resources, the "harvest" of seals and whales. With the EU banning almost all trade in seal products it seems only logical that subsidies will be the only way to keep this "harvest" alive.

Furthermore, the Senterpartiet wants to maintain the monopoly of the sales organisations and the barriers to the entry in the profession as set-out in the "Participants' law (Deltakerloven). This is perfectly in line with the tradition of a party which has farmers as its main constituency.

The proposal to subsidise the construction of landing sites and the transport of fish is not a surprising one. Indeed, the previous government had launched a vast subsidy programme for fishing infrastructure (see my post of 21 March 2009 "NORWAY: hundreds of millions of krona for fisheries specific infrastructure").

Such policy explains Norway's defence at the WTO of subsidies to fisheries infrastructure. In Norway's written submission to the WTO fisheries subsidies negotiations (TN/RL/GEN/144 of 26/01/2007) we can read "OECD figures on transfers demonstrate that, on average, around 70 per cent of the transfers are used to finance either biological research and fisheries management systems or are measures financing infrastructure, such as harbours and fishing community installations. These are all measures that the majority of WTO Members agree should fall outside the scope of the new discipline."

So, it seems that according to Norway, subsidies to fishing infrastructure do not have negative impacts on fisheries resources.

Finally, it is more than clear that the Senterpartiet would have serious problems with the introduction of "cost-recovery" fisheries in the fisheries and aquaculture sector. The proposals to abolish fees and to oppose the introduction of a "control fee" are a clear illustration of this. This is in stark contrast with the positions of some key members of the WTO "Friends of Fish" group that consider that the non-recovery of fisheries management costs (including control) is a substantial subsidy.

Here are links with the proposals (in Norwegian) of the Senterpartiet for the fisheries sector:

http://produksjon.senterpartiet.no/article.php?articleID=34280

http://www.fiskebat.no/files/documents/spfiskeri.doc

USA: Louisiana's governor ask for federal assistance for shrimpers

The US shrimp industry continues to complaint about low prices for shrimps.

The situation seems so serious that

Governor Bobby Jindal has written to the U.S. the Commerce Secretary and to the Chair of the U.S. the International Trade Commissionthe to open an investigation into the "trade practices" of foreign countries that may be unfairly manipulating the shrimp industry's marketplace.

The Governor's letter was triggered by strikes and protests by shrimpers, complaining about the rock bottom prices they get for their harvest.

Interesting to note is that the U.S. did impose anti-dumping duties on imports of shrimps from a number of developing countries (see my post of 26/04/09 USA: will US fishermen survive without subsidies?). As mentioned in this post , the U.S. shrimpers have received subsidies coming from the funds collected by the U.S. Customs when applying the anti-dumping duties.

Furthermore the Governor has been quoted as saying:

“I’ll be issuing an executive order to make sure our state agencies are buying Louisiana shrimp to the extent that they are not doing so today, to make sure they are not buying frozen or imported product,”

Finally, I would like to bring to mind another post on Louisana where I mentioned that subsidies related to "fisheries disaster" were to be provided to the State's fishermen (12/06/09 USA: Lousiana providing subsidies because of a "fisheries disaster")

Here is the link to the official text of the letter to the federal authorities:

http://wwwprd.doa.louisiana.gov/LaNews/PublicPages/Dsp_PressRelease_Display.cfm?PressReleaseID=2176&Rec_ID=1

And here a news article where you will find the above statement by Mr Jindal:

http://www.2theadvocate.com/news/55999647.html

NORWAY: special income tax deduction for fishermen

In a previous post i was referring to the special income tax deduction for fishermen (fisker skattfradrag, fiskerfragrag).

In Norway professional fishermen can deduct a certain sum from their taxable income. They can deduct up to 30% of their income up to a total amount of NOK 150,000.

It should be noted that the maximum amount has been raised twice in the two last years. The 2008 revised budget included an increase of this deduction from NOK 80,000 to NOK 115,000 i.e. an increase of 43.75 %. In 2009 this amount was again increased to 150,000, i.e. 30.4 % on a year basis. If we calculate the increase from 2007 to 2009, this tax deduction allowance has been by 87,5 %.

As mentioned in my previous post, the Norwegian Ministry of Finance has estimated that the total subsidy provided to the fishing industry by way of this measure amounts to NOK 284 million (USD 47.3 million) for the year 2009.

Here is a link to a government's webpage (in English) providing information abouts Norway's personal tax system.

http://www.regjeringen.no/en/dep/fin/Selected-topics/economic-policy/topics/The-personal-tax-code.html?id=418108

And here a link to a webpage from the Finance Ministry announcing the increase of the deduction for the year 2009.

http://www.regjeringen.no/nb/dep/fin/dok/regpubl/otprp/2008-2009/otprp-nr-1-2008-2009-/14.html?id=529127

NORWAY: economic support for shipping and fishing sectors

A couple of Norwegian sites have recently published a piece of news titled "Skipsfarten mottar 6,3 milliarder i næringsstøtte". Translated into English: "Shipping industry receives NOK 6.3 billion support (or subsidies)". The figure of NOK 6.3 billion corresponds to USD 1.05 billion or EUR 732 million.

This news relates to an estimate, prepared by the Norwegian Ministry of Finance, of all the subsidies received by the different economic sectors in Norway. Such exercise includes interesting information about the subsidies provided by the central government to the industry. it is carried out in the context of the yearly budget.

The figure quoted by the aforementioned websites concern the year 2008 and cover the transfers to the shipping industry (skipsfart) and the fishing fleet (Fiskeflåten).

For the fishing fleet the total amount of support for the year 2009 has been estimated at NOK 589 million (USD 93) and corresponds to the following items:

In the table appears an interesting item which, by the way, has not been discussed in this blog, i.e. the tax deductions for professional fishermen (fisker skattefradrag). I will discuss it in a separate post.

Here is the link to the document published in the Norges Fiskarlag website. The above table is the translation into English of the table appearing in the document.

http://www.fiskarlaget.no/index.php/Nyheter/Nyheter/Skipsfarten-mottar-6-3-milliarder-i-naeringsstoette.html

Here is also a link to Norway’s government information (in Norwegian) on the estimates of support to certain economic sectors. The information relates to the 2009 budget:

http://www.regjeringen.no/nb/dep/fin/dok/regpubl/stmeld/2008-2009/stmeld-nr-1-2008-2009-/6/3.html?id=529358

NEW ZEALAND: documentary on NZ fishing practices

A documentary titled “The Great New Zealand Fishing Scandal” is making a lot of noise in that great fishing nation.

The main theme of the documentary, made by the investigative journalist Guy Henderson, are the fishing practices by foreign vessels that are allowed to harvest fish in NZ waters on behalf of domestic companies.

According to the New Zealand press the documentary shows foreign factory vessels (with foreign crews) chartered by New Zealand companies to catch fish under the quota (e.g. of orange roughy) of the latter.

Some of the comments made in the aforementioned press echo a certain degree of discontent, as such practices can result in New Zealanders being deprived of jobs in the fishing industry. Furthermore the documentary seems to point to an alleged lack of control on the operations of these foreign vessels.

New Zealand’s Maritime Union has asked for a Parliamentary investigation on this matter.

At any rate, New Zealand is a strong competitor in international trade in fisheries products. The New Zealand government has always contended that it does not provide subsidies to its fishing industry. It is thus to the credit of private operators that they try to do their utmost to lower their cost to remain competitive in the international markets, including by hiring foreign vessels that are less expensive to operate than domestic vessels.

I tried to find an official reaction to the documentary but without success. I would very much welcome if readers can provide me with information on a reaction from New Zealand’s authorities, or from NZ companies, to the documentary.

By the way, this documentary reminds me of a number of articles, back in 2006, about criticism by Maoris on proposal by the government to regulate the salaries paid in these foreign chartered vessels.

Here a few links on the contents of the documentary.

http://www.munz.org.nz/index.php/2009/08/05/inquiry-into-fishing-industry-needed/

http://www.documentarychannel.co.nz/synopsis?show=fd818130-8b17-4065-9f0e-42154b6248d3

http://www.scoop.co.nz/stories/PO0907/S00133.htm

http://www.scoop.co.nz/stories/PO0908/S00055.htm

http://newzealandconservative.blogspot.com/2009/08/new-zealands-third-world-fisheries.html

An interview (in MP3 format) with the maker of the documentary can be found here.

http://www.wammo.co.nz/2009/08/03/the-great-nz-fishing-scandal/

Information on NZ’s legislation concerning treatment of foreign chartered vessel crews can be found here:

http://www.immigration.govt.nz/community/stream/employ/employingtemporaryworkers/whatisrequired/nonzworkers/specialfields/foreignfishingcrews.htm

Here is a link to an article published in the “Australia and New Zealand Maritime Law Journal” Vol 23, No 1 (2009) titled “Modern Day Slavery: Employment Conditions For Foreign Fishing Crews In New Zealand Waters” written by Jennifer Ann Devlin.

https://maritimejournal.murdoch.edu.au/index.php/maritimejournal/article/view/82

And here is a link on Maori’s criticism to setting foreign crew wages at the same level as NZ‘s ones

http://www.newstalkzb.co.nz/newsdetail1.asp?storyID=104952

NORWAY: Minimum Price for cod under serious strain

Almost a month ago I wrote a post on the Norwegian Minimum Prices for selected fish species. Cod is one the species covered by this system.

This year prices for cod products sold at retail outlets have been rather low. Salted cod, very popular in Portugal as “bacalhau”, has been one of those products that have experienced very low prices during late 2008 and throughout 2009. Most of the “bacalhau” marketed in Portugal has, as main ingredient, salted dried codfish, usually from Norway (Bacalhau da Noruega).

The fishermen’s Sales Organisation, having the monopoly of sales in a large area in Norway, the “Norges Råfisklaget”, did set the price of the raw material at levels that put the processing companies (drying and salting cod) between the hammer and the anvil as retail prices in the main export markets (e.g. the EU) did not recover to the expected levels.

In actual fact a number of processing companies in Norway had purchased cod at a rather high price and build up substantial stocks as no buyers were found in the export markets.

Some Norwegian websites specialised in fish and fish trade, such as www.fiskeribladetfiskaren.no (in Norwegian), have been publishing news on this subject. I was astonished by the numerous comments posted by readers (fishermen and processors). As you can imagine fishermen, in their comments, defended the minimum prices while buyers (processors) appeared to be against the system.

The situation of some of the processors seems so desperate, at least in the Northern part of Norway, that some have asked the government to provide help, in the same way fishermen have been helped because of the financial crisis.

My reading is that such system of Minimum Prices can only work in a market where competition from imported product can be suppressed by means of, for example, a “tariff wall”. The products sold through the Minimum Prices are not intended for the final consumers but rather subject to further processing and export outside Norway. There, in the real (export) markets, Norwegian cod will have to compete with produce from Iceland and Russia. It will also face competition from other fish species, such as pangasius or tilapia.

As a final comment I would like to add that some in Norway, in particular the Association of Fish Buyers” (Fiskekjøpernes Forening) are opposing an increase of 20% in catch quotas for cod next year, as requested by the Federation of Owners of Fishing Vessels (Fiskebåtredernes Forbund). The Fish Buyers fear that such an increase will further contribute to the low prices of cod in Norway’s export markets.

Will the Norwegian government give in to the pressure of the Fish Buyers and provide subsidies to the processing sector?