Financing and Marketing Management

Unit 19 - Trade liberalization and fisheries markets

19.2. Subsidies in Indian fisheries
At the global level, the debates on subsidies in fisheries focus mainly on their impacts upon trade and environment, and largely bypass other dimensions like equity issues, livelihoods and welfare. The debates take place at such a high level and in such abstruse language that the contribution of primary stakeholders to the evolving agreements has been extremely low. Indian subsidies in fisheries, particularly those that are contingent upon exports, appear to be miniscule and are not likely to be affected in the context of a stricter disciplining of fisheries subsidies. In fact, by focusing the discussion on subsidies to their trade related impacts alone, the international community might actually tempt countries like India to spend more on subsidies of the ‘effort-and capacity-enhancing’ category.
In the general macro-economic context of India, subsidies are increasingly frowned upon at the policy level and there is a proposal to cut the existing subsidies across different sectors. However, in practice, there is evidence that the total subsidies have actually grown in the late 1990s. In terms of direct subsidies in fisheries, there does not appear to have been any cuts in the reform period, due perhaps to the fact that the total outlay of fisheries in the national plans works out to a quarter of one percent and imposing fiscal discipline on such a miniscule sector does not help the economy significantly. Subsidies in fisheries are also miniscule when compared to other sectors like agriculture, prompting many people in the government itself to demand for more subsidies for fisheries, not less. Even if there is a cut in the direct subsidies in the fisheries sector, the impact on many stakeholders may not be significant, except in case of those providing some kind of social security.
The lifting of tariffs and quantitative restrictions in the fisheries sector during the 1990s is not followed by any perceptible benefits or ill effects, but apprehensions about their possible negative effect are widespread and generally justified. The possibility of fish imports swamping Indian markets and foreign deep sea fishing vessels allowed to operate in the Indian EEZ are two potential areas of concern for the producers. In terms of exports, the new trade policies have not contributed much because of (i) decline in availability of shrimp and (ii) uncertainties in international markets. In fact, the Indian export trade has stagnated since late 1990s and in many cases declined.
Although the negative environmental and livelihood implications of the modernization programme are quite evident, there is continuing support at the policy level for more technological interventions in the capture sector. This aspect needs consideration and a blanket ban on the ‘effort-and capacity-enhancing’ subsidies – irrespective of their professed benevolence – might be necessary. Indirect subsidies in general category (i.e., not specific to fisheries) – such as petroleum products (HSD oil, Kerosene, LPG), electricity (affecting processing and ice making) and welfare (health and food) – have been reduced with serious impacts on the stakeholders.
Changes to direct and indirect subsidies cover a range of areas and the primary stakeholders have been finding it difficult to cope with the changes, not least because of unpreparedness and lack of alternatives. These changes have an impact upon the livelihood assets and strategies of the poor, although in a context where change is occurring at different levels and dimensions simultaneously, the tangled skein of cause and effect is difficult to unravel. The overwhelming impression among many informants is that the changes so far are only the tip of the iceberg, and that the real changes will become more significant in the coming years.