The Incofish WP 8

Rashid Sumaila (& Team)Fisheries Economics Research Unit

UBC Fisheries centreand

University of Namibia r.sumaila@fisheries.ubc.ca

Incofish Mid-Term Workshop March 12-16, 2007

Outline

• Project objectives;

• Deliverables;

• Publications;

• Presentations and media;

• Fisheries subsidies;

• Further work.

Project objectives

• Provision of social and economic data to the project database;

• Valuation of marine ecosystem goods and services;

• Develop economic and social indicators of ineffective management;

• Develop policy options for sustainable coastal resources management;

• Write final Work Package report;• Publish at least 5 papers in the primary

literature.

Deliverable 1 Economic & Social Database

(Submission: Month 13, May 31, 2006)

• Economic and social data:

• Coastal stakeholders and social data;– Economic data

• Price;• Cost of fishing;• Non-market values;• Subsidies.

– Institutional data.

Deliverable 2Ecosystem values

Submission: Month 19, Nov. 30, 2006

• Market:– Fishery values;– Tourism/recreational values;

• Non-market:– Meta-analysis of available valuation results.

Deliverable 2 (cont’d)

• Habitat-fishery interactions and values;

• Discounting & future generation values;

• Use of ecosystem models to explore consequences of ineffective management.

Deliverable 3Analysis of ineffective management: Indicators

(Submission: Month 25, May 30, 2007)

• Indicators of ineffective management:– Poverty index;– Subsidy index;– Conservation index;– Overcapacity index;– Policy sensitivity index.

Deliverable 4, 5 and 6

• Deliverable 4: Policy options (Submission: Month 31, Nov. 30, 2007);

• Deliverable 5: Final Report (Submission: Month 34, Feb. 28, 2008);

• Deliverable 6: 5 Scientific papers (Submission: Month 34, Feb. 28, 2008).

Publications (Valuation)

• Sumaila, U.R., Dale Marsden, Reg Watson, and Daniel Pauly (in press) Global ex-vessel fish price database: construction and applications Journal of Bioeconomics.

• Sumaila, U.R. (in press) Getting values and valuation right: A must for reconciling fisheries with conservation. Proceedings of the American Fisheries Society Conference.

• Alder, J., S. Hopkins, W. W. L. Cheung and U. Rashid Sumaila (2006). Valuing Marine Habitats: Fantasy or Fact? Fisheries Centre Working Paper #2006-03, The University of British Columbia, Vancouver, BC, Canada.

Publications (Subsidies)• Clark, C.M., G. Munro and U.R. Sumaila (in press).

Buyback, subsidies, the time consistency problem and the ITQ alternative. Land Economics.

• Khan, A., Sumaila, U.R., Watson, R., Munro, G., Pauly, D., 2006. The nature and magnitude of global non-fuel fisheries subsidies. Fisheries Centre Research Reports 14(6) , p. 1-34.

• Sumaila, U.R., L. Teh, Watson, R., P. Tyedmers, D. Pauly. 2006. Fuel subsidies to fisheries globally: Magnitude and impacts on resource sustainability. Fisheries Centre Research Reports 14(6), pp. 39-49.

• Sumaila, U.R., Khan, A., Teh, L., Watson, R., Tyedmers, P., Pauly, D. 2006. Subsidies to high seas bottom trawl fleet and the sustainability of deep sea benthic fish stocks. Fisheries Centre Research Reports 14(6), pp. 47-51.

Publications (Future generations)

• Berman, M. and U.R. Sumaila (2006). Discounting, amenity values and marine ecosystem restoration. Marine Resource Economics. 21 (2) 211-219.

• Sumaila, U.R. and C. Walters (2007). Making future generations count: Comment on “Remembering the future”. Ecological Economics 60(3), 487-488.

• Sumaila, U.R. (2005). Differences in economic perspectives and the implementation of ecosystem-based management of marine resources. Marine Ecology Progress Series, 279-282.

Publications (General – developing countries)

• Sumaila, U.R. and K. Stephanus (2006). Declines in Namibia's pilchard catch: the reasons and consequences. In Rognvaldur Hannesson, Manuel Barange and Samuel F. Herrick Jr. Climate Change and the Economics of the World's Fisheries- Examples of small pelagic stocks. Edward Elgar, Cheltenham, UK, pp. 205-214.

• Perry, R.I. and U.R. Sumaila (2007). Marine ecosystem variability and human community responses: the example of Ghana, West Africa. Marine Policy 31(2) 125-134.

• Louise Teh and U. Rashid Sumaila (in press) Malthusian Overfishing in Pulau Banggi? Marine Policy.

Presentations and media

• Presentations:– Several, some high-powered.– Lots of media attention for our work.

Fisheries subsidies: A definition

Fishery subsidies are financial payments

from public entities to the fishing sector,

which help the sector make more profit than

it would otherwise.

Why the concern about subsidies?

• Subsidies are substantial and have to be paid by someone;

• Global estimates:– FAO estimate: US$54 billion annually;– World Bank estimate by Milazzo in 1998 was US$ 14-20 billion per year;– Re-estimated in this work to be between 30-34 billion annually.

Why the concern about subsidies?

• Subsidies have socio-economic, distributional and trade impacts on fishing communities, regions and countries;

• Fisheries subsidies recognized world wide as contributing to overfishing.

Why the concern about subsidies?

• Overcapacity and overfishing• overcapitalization and subsidies

Fishing Intensity

19001900

19991999

Biomass Biomass

Courtesy V. Christensen

1.8-2.51.5-1.81.2-1.50.9-1.20.7-0.90.6-0.70.4-0.60.3-0.40.2-0.30.1-0.20-0.10-0

Biomass t·km-2

Why the concern about subsidies?

Source: Froese and Pauly (2004).

How subsidies induce overfishing

MEY

MSY Bionomic equilibrium (BE)

Total cost of fishing effort (TC)

Total Revenue (TR)

Fishing effort (E)

TR & TC ( $)

E1 E2 E3

Max. rent

TC1

TC2BE2

BE1

TR

TR& TC ($)

E3 E4 Fishing effort (E)

Cost-reducing subsidies

Gordon Schaefer bioeconomic model

Identifying & categorizing subsidies

• FAO (2002, 2004) guidelines;

• Milazzo (1998);

• OECD publications;

• Potential impact on fish stocks.

Identifying & categorizing subsidies

• Good subsidies (‘investment’ programs in fish stocks): • Fisheries management and services;

• Fisheries research and development.

• Bad subsidies (‘disinvestment’ programs in fish stocks):• Tax exemption programs;

• Foreign fishing access payments;

• Boat construction renewal and modernization programs;

Identifying & categorizing subsidies • Fishing port construction and renovation

programs; • Fishery development projects and support

services;• Marketing support, processing and storage

infrastructure programs, and• Fuel subsidies.

• Ugly subsidies (programs can be either ‘good’ or ‘bad’):• Fisher assistance packages;• Vessel buyback programs;• Rural fishers’ community development programs.

Computing subsidies

• Created a database of the 12 types of subsidies identified for 144 maritime countries for 1995 to 2005;

• Information for each country was filtered into 3 groups:– Group 1: Monetary value of subsidy available; – Group 2: No subsidy amount reported but it is

known that subsidies are provided;– Group 3: Either no information, or where we

know that no subsidies were provided.

Computing subsidies • Obtain a ratio of subsidies to countries’

landed value (LV) for Group 1;• Obtain developed & developing country

mean of this ratio for each subsidy type;• Use weighted averages to fill the gaps,

i.e., computed Group mean multiplied by LV for Group 2 countries;

• Sum subsidies for all countries (known and estimated amounts) to obtain global magnitude.

Total global subsidies

0 3 6 9 12 15 18 21 24 27 30 33 36

Fuel subsidies

Fisheries mngt & services

Fishing port construct. & renovation

Fish. develop. projects & services

Market., process., & storage infrast.

Fisher assistance

Boat construct., renewal & modern.

Tax exemption

Fisheries R & D

Fishing access agreements

Rural fisher community develop.

Vessel buyback

Global total

Subsidy amounts (USD billion)

Developing countries

Developed countries

Comparing estimates

All except fuel

Fuel

0

10

20

30

40

50

60

FAO (1992) This study Milazzo (1998)

Subs

idy

amou

nts

(USD

billi

on)

Subsidies by category

0

5

10

15

20

25

The Good The Bad The Ugly

Subs

idy a

mou

nts

(USD

billi

ons

) Developed countries

Developing countries

Subsidies by geographical region

0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17

Asia (All)

Europe

Lat. America & Caribbean

North America

Sub Saharan Africa

North Africa & Mediterranean

Oceania

Subsidy amount (billion USD)

Good subsidies Bad subsidies Ugly subsidies

Subsidies by major fishing nations

0

1

2

3

4

5

6

Japan EU China Russia USA Peru

Subs

idy a

mou

nt (U

SD b

illion)

.

Good subsidies Bad subsidies Ugly subsidies

Subsidy indices

• Percentage of ‘Bad’ subsidy to total subsidy’;

• Ratio of landed value/total subsidy;

• Number of fishers to per $1000 subsidy.

Indices: Top 10 performers

Countries% (Bad/Total

Subsidy) CountryLV/TotalSubsidy Country

# Fishers/$1000 Subsidies

New Z. 0.0 Nigeria 21 Nigeria 3523

Peru 1.0 New Z. 14 Indonesia 996

Nigeria 4.4 Chile 10 Egypt 626

Ireland 14.0 UK 8 Bangladesh 411

USA 20.7Netherla

nds 6 China 389

Sweden 22.2 Iceland 5 Vietnam 263

South Africa 27.6

Indonesia 5 India 242

Japan 28.7 Turkey 5 Sri Lanka 202

UK 33.8 Australia 5 Philippines 173

Canada 35.2 Sweden 5 Pakistan 128

Indices: Bottom 10 performers

Country

% (Bad/TotalSubsidy) Country

LV/TotalSubsidy Country

# Fishers/$1000 Subsidies

Namibia 87.4 Peru 0.8 France 7

India 87.6 Brazil 0.8 Peru 6

Taiwan 88.0 Bangladesh 0.6New Zealand 6

Spain 89.7 Ghana 0.5 Australia 4

Yemen 90.9 Latvia 0.5 Iceland 4

Thailand 92.1 Taiwan 0.4 Namibia 2

Brazil 94.0 Thailand 0.4 Argentina 2

Turkey 96.7 Japan 0.4 Canada 1

China 98.8 Denmark 0.2 Denmark 1

Malaysia 99.7 Ukraine 0.2 Angola 0

Further work

• Continue …– populating our databases;– developing our valuation approaches;– working on socio-economic indicators;– Collaborate with work package 7 on the global

cost of overfishing, and the conservation index;

– Working towards deliverables 4, 5 and 6.

• Present in a number of forthcoming meetings.

Thanks for your attention

EC Contract No. 003739