1. Fisheries Subsidies Worldwide: Economic and environmental impacts
Ragnar Arnason
Fisheries Subsidies Worldwide: Economic and environmental impacts
Presentation at the conference
Economic Advice in Fisheries Management
Malta
February

2. Why are subsidies problematic?
Generally alter/distort economic activity
Usually in a negative direction (  GNP ↓)
Exception: When they correct other distortions
Positive and negative subsidies
Positive subsidies: Encourage the subsidized activity
Negative subsidies (taxes): Discourage taxed activity

3. Positive subsidies are particularly damaging in fisheries!
Increase fishing effort
Reduce fish stocks and increase environmental damage
Reduce the flow of net economic benefits
Reduce the supply of fish (usually)
Long term threat to fishing communities

4. Impact of subsidies: Subsidized inputs
Sustainable
revenues
Costs
Value, $
Loss=subsidy
Subsidized costs e0 e1
Effort x1
So ….
Effort 
Stocks 
Benefits 
Landings  x0
Sustainable
biomass
Biomass

5. Global fishery subsidies: Estimates
- Differ widely -
UBC Fisheries Centre
Summary
FC  $30B; no trend
WB  $10B; declining trend WB WB WB
Explanation:
FC: All fishery related expenditures
WB: Only distortionary expenditures

6. End fisheries subsidies as soon as possible!
Conclusions
Fisheries subsidies are severely detrimental
Economically and environmentally
Worldwide subsidies are substantial relative to the value of landings
Significantly harmful to global welfare!
Appropriate policy:
End fisheries subsidies as soon as possible!

7. END