DO SUBSIDIES WORK?
Alternative programmes should be created to boost livelihood of small-scale fishermen
THERE is growing belief that subsidies can lead to sustainable fisheries and contribute to the wellbeing of fishermen if there is better management of fishing and harvesting methods.
In Malaysia, fisheries’ subsidies include fuel, monthly allowance, catch incentives, fishing equipment and other investments in infrastructure for fisheries development. The positive contribution from subsidies to resource conservation and wellbeing of fishes is important for the livelihood of coastal fishing communities.
Fisheries’ subsidies reduce the cost of operation and generally motivate fishermen to do more fishing, hence, it is difficult to achieve conservation goals in fisheries.
Fisheries is a complex matter in Malaysia because fishermen use different types of fishing equipment. Traditional fishermen use small boats with low-powered engines at the near-shore coastal areas. For areas within 30 nautical miles from the shore and offshore fishing beyond 30 nautical miles, fishermen use large commercial trawls. Traditional fishermen spend less hour fishing, and harvest low amount of fish compared with commercial fishermen. There is a debate on the impact of fisheries’ subsidies on the environmental and economic conditions of small-scale fishermen.
The government introduced fisheries’ subsidies in 1970s in the form of direct livelihood support to poor fishermen. Fuel subsidy introduced in 2008 has become the major component of fisheries’ subsidies, which accounts for 67 per cent (RM474 million) of the total subsidies in 2012 (Economic Planning Unit report, 2013).
The recipients for the fuel were mainly small-scale traditional fishermen, who comprise more than 70 per cent of the fishermen in the country. Fishermen have received cash assistance (1Malaysia People’s Aid, or BR1M), which accounts for 24 per cent of the total fisheries’ subsidies (RM172.8 million) in 2012.
Generally, fuel subsidies are viewed as bad as they contribute to capacity enhancement in fisheries. Excess fishing capacity may cause deterioration of the resource and pose negative impact on the wellbeing of the poorest fishing community.
A recent study highlighted the impact of fisheries’ subsidies on the economic conditions of fishers and marine resources in Malaysia. The study was conducted in three coastal small scale fishing communities of Terengganu, Kedah and Selangor.
The results found that fishing efforts of small-scale fishermen was substantially less compared with fishermen of commercial boats. The average fish catch per hour of fishing (hour/per month) for traditional fishermen was significantly different from commercial boats (trawls). The commercial vessels were able to catch 12 times more than traditional fishing boats. This indicates that the relatively low-powered boats operating at nearshore areas were less efficient. The cost of fishing operation increased, fishermen spent more than 70 per cent of total operational cost for fuel use. Traditional and commercial fishermen used extra fuel from open market as the quantity of subsidised fuel was not adequate.
The average fishing income for the large boat operators was six times higher than traditional fishermen. The larger boat owners were able to invest in modern fishing equipment that substantially increased catch and income while small-scale fishermen failed to increase substantial income from fisheries’ subsidies.
This suggests that fuel subsidies has encouraged more fishing, especially the large vessels with increased catch through excessive fishing. The evidence shows that there is inequitable distribution of the benefits.
The majority of the traditional small-scale fishermen received cash aid from BR1M. The government has increased cash aid since 2015. The results shows that BR1M helped many poor fishermen, who have no alternative livelihood earning. The government has introduced fuel subsidy rationalisation to provide sustainable benefits for the poorest community.
The results of the study also suggest that the fuel subsidy programme may not be an effective strategy for boosting income for the artisanal (small-scale) fishing communities.
Some alternative income generating programmes should be created to boost their livelihood. Creation of non-fishing economic activities in the tourism and aquaculture sectors may reduce overfishing and dependency on fuel subsidy for fishing activities.
The study has shown that the fisheries’ subsidies has attracted fishermen, which leads to an increase in fishing activities. No doubt, fisheries’ subsidies provide benefits for artisanal fishermen but excess fishing creates pressure on the resource.
Given the fisheries management and governance, these problems cannot be simply reduced with the elimination of subsidies, both socially and politically; but effective planning and designing of subsidies’ programmes may improve the wellbeing of fishermen.