Fisheries Economics

8.2.4 Fisheries Subsidies & WTO

Today we see overfishing to be more pervasive than ever before, particularly in the marine fisheries, wherein it has become a serious issue with its attendant problems such as over-capitalisation, depletion of resources, labour lay-off, exploitation of threatened and endangered species, pollution, etc. In most of the developing countries, marine fisheries remain an open access fishery as they do not have property rights or user rights to the fisherfolk. Further, provision of subsidy to them for marine fishing activities is also considered to have adversely impacted the marine fishery resources.

Fisheries subsidies are provided across the globe. It did not figure in trade discussions till the Doha round of discussions. The fourth Ministrial meet of the WTO held in Doha in November 2001, directed that negotiations on fisheries subside should be completed before January 1, 2005.

Several agencies wondered whether the regular WTO Agreement on Subsidies and Countervailing Measures (ASCM) could be applied to fisheries since it has its own uniqueness.

The issue of fisheries subsidies is believed to have impacted four major effects:

a) Over-capitalisation effect

b) Technology effect

c) Resource inefficiency effect

d) Over-harvesting effect

These effects barring the last one proved inimical to the environment through investment decisions based on distorted price signals from subsidies. Lack of responsible fishing as well as bad resource management decisions resulting from artificial subsidies had led to the over-harvesting effect.

Furthermore, over-consumption effect and public resource deprivation effect are the other impacts caused by distorted subsidies on the environment.