SUSTAINABILITY CRITERIA FOR FISHERIES SUBSIDIES: THE LATIN AMERICAN CONTEXT
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1 SUSTAINABILITY CRITERIA FOR FISHERIES SUBSIDIES: THE LATIN AMERICAN CONTEXT July 2009, Guayaquil, Ecuador The Sunken Billions Kieran Kelleher Fisheries Team Leader The World Bank The Economic Justification for Fisheries Reform
2 it s too many fishers illegal fishing no political willingness forget fishing, more money in aquaculture corruption? it s globalization need more subsidies! it s global warming 10 th Annual Forum on the Global Fish Crisis
3 key messages the Sunken Billions is a tool to provide an economic justification for fisheries reform economic and political decision makers are the target audience the way forward means turning economic justification into socially acceptable reform pathways and requires greater understanding reform design and change management
4 contents 1. objectives and rationale 2. results trends and indicators efficiency of fleets and fishers example subsidies 3. summary - next steps
5 Sunken Billions objectives build the economic justification for fisheries governance reform raise awareness at global and national level targeting targeting ministries of finance, economics and planning present the story of the world s depleted and overexploited marine fisheries in economic terms complement existing agendas, e.g. ecosystem approach, povery reduction, climate change
6 approach provide a global estimate economic losses resulting from ineffective fisheries governance: the Sunken Billions verifable, replicable, commercial harvest costs of transition? used a global bioeconomic model case studies case studies to foster reforms at national level e.g. Peru anchoveta, Chile jack mackerel
7 little progress to restore the health of fish stocks by 2015 Johannesburg WSSD - PoI 75% of stocks fully or overexploited productivity decreasing subsidies ~ $20 billion per year increasing with fuel prices illegal fishing ~ $9 billion per year exports US$ billion Developing country fish exports Export value ($ billion) Seafood: a $400 billion industry
8 what does this mean in economic terms? ~ $50 billion annual rent drain ~ 2 trillion since 1974 national and global capital depleted little accountability at country level country-level state of stocks lack environmental accounts
9 key trends in global marine capture fisheries - physical - global marine world s capture fisheries production has been stagnant for nearly two decades and for demersal resources for three decades numbers of fishing vessels and fishers have continued to increase fishing technologies have grown more efficient
10 declining productivity, but increasing fishing fleets and fishing power
11 key trends in global marine capture fisheries - socioeconomic - real fish prices have stayed relatively flat input prices have increased or been volatile real incomes in fishing have declined at global level, profits (if any) are marginal weak fisheries management has (on average) nullified any improvements in productivity gains
12 rising input prices - steady export prices 250 Real crude oil price index 200 Real material cost index Real export unit value Indices: 1998 = 100
13 growing numbers of fishers declining catch per fisher 35,000 6 Asia Number of fishers (thousands) 30,000 25,000 20,000 15,000 10,000 Total Catch per fisher Catch per fisher (kg) 5, trend in average catch per fisher (kg)
14 half the fishing half the fuel there is massive overcapacity in the global fleet the current marine catch could be achieved with approximately half of the current global fishing effort if fish stocks were rebuilt the excess fleets competing for the limited fish resources results in stagnant productivity and economic inefficiency. to maintain profits the global fleet has reduced labor costs increased subsidies and increased investment in technology real income levels of fishers remain depressed as the costs per unit of harvest have increased (partly as a result of the poor economic performance)
15 case studies Peru anchoveta Chile jack mackerel Atlantic bluefin tuna China: Yellow sea demersal Bangladesh hilsa* Icelandic cod Indian Ocean tuna Japan coastal squid, Pacific saury Indonesia Bali strait small pelagics Mauritania octopus Norwegian spring spawning herring Namibia hake Gulf of Thailand Thai demersal and pelagic Vietnam Gulf of Tonkin fishery Western Central Pacific tuna From outside Rent Drain Project New Zealand fishery accounts Norway and Nordic studies Australia G. Carpentaria South Africa GDP study USA global, G. Maine groundfish G. Mexico shrimp Alaska reforms * UNU/ University of IceIand
16 Peru: world s largest fishery too many fishers chasing too few fish Rent loss ~ $200 million Rent loss ~ $200 million Processing capacity 30 million tons Fleet catching capacity million tons 30 fishmeal processing capacity 20 fishing fleet capacity 8 8 factories boats fish Scientific advice catch 2 8 million tons 2 5 El Nino (2 million) La Nina (8 million)
17 the question of subsidies % of agricultural GDP % of agricultural GDP
18 the question of subsidies if possible phase out, in particular subsidies that increase fishing effort and overcapacity,.. if not do economic benefits exceed costs? usually no! are subsidies socially necessary? are alternatives more cost effective? do they benefit the poor or an elite? if necessary, subsidies should be: be temporary and part of broader (fisheries) strategy complement investments in good governance including improved productivity and fiscal coherence
19 fisheries governance a better way business as usual Johannesburg Plan of Implementation focus on fish restore stocks 2015 little/no accountability public actors focus on rules, laws and enforcement broader governance framework focus on benefits, incentives limit access, secure tenure incentives driving sustainable use public and private actors tackling corruption public private partnerships stable investment climate
20 next steps disseminate message to finance and planning ministers prepare country-level rent drain estimates on demand identify principles and lessons on fisheries reform and change management principles allocation and equity political processes and consensus building timing, sequencing, financing incentives
21 summary the crisis in fisheries has been largely treated as a fish issue, rather than an economic issue solutions exist, but reforms are politically sensitive with many social issues the challenge: turn economic justification into socially acceptable pathways greater understanding of reform design and change management political opportunities, timescales, sequencing, equity, financing
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