Comments due by Nov. 5, 2018
Globally, our estimates of high-seas fishing
profits (without accounting for subsidies) ranged between −$364 million and
+$1.4 billion . We estimated that governments subsidized high-seas fishing with
$4.2 billion in 2014, far exceeding the net economic benefit of fishing in the
high seas. This result suggests that without subsidies, high-seas fishing at
the global scale that we currently witness would be unlikely (at the aggregate
level), and that most of the negative returns accrue from China, Taiwan, and
Russia . Coupling our estimates of profits with country-level subsidies
suggests that subsidy-distorted high-seas profits range between $3.8 billion
and $5.6 billion.
We conducted these calculations spatially,
revealing that, even with subsidies and our lowest estimate of labor costs, 19%
of the currently fished high seas cannot be exploited profitably at current
rates . Assuming higher labor costs, and the fact that companies still receive
subsidies, the area of unprofitability jumps from 19 to 30%. Finally, without
subsidies and low wages to labor, the area of unprofitability shoots to 54%,
implying that without subsidies and/or low labor compensation, more than half
of the currently fished high-seas fishing grounds would be unprofitable at
present exploitation rates.
The
countries that provided the largest subsidies to their high-seas fishing fleets
are Japan (20% of the global subsidies) and Spain (14%), followed by China,
South Korea, and the United States . It is remarkable that in these cases, the
subsidies far exceed fishing profits, with the extreme being Japan, where
subsidies represent more than four times our estimate of their high-seas
profits. For 17 countries, contributing 53% of the total high-seas catch,
current extraction rates would not be profitable without government subsidies .
Among these countries, China and Taiwan alone account for 47% of the total
high-seas catch, which is significant. Whether subsidies enable profitability
or not, the magnitude of subsidies and the fact that many of these subsidies
lower the marginal cost of fishing suggest that high-seas fishing activity
could be markedly altered in their absence.
Targeting
mainly large mobile, high-value fishes such as tuna and sharks, are the most
profitable high-seas fisheries . All other fisheries are either barely
profitable or unprofitable. We estimate that deep-sea bottom trawling would not
be globally profitable at current rates without government subsidies, with
maximum annual losses of $230 million before subsidies. Similarly, squid
jiggers would be, on average, very unprofitable without subsidies, with maximum
annual losses estimated at $345 million.
By
and large, fishing the high seas is artificially propped up by an estimated
$4.2 billion in government subsidies (more than twice the value of the most
optimistic estimate of economic profit before subsidies are taken into
account). The economic benefits vary enormously between fisheries, countries,
and distance from port. On aggregate, current high-seas fishing by vessels from
China, Taiwan, and Russia would not be profitable without subsidies. This is
globally significant since these three countries alone account for 51% of the
total high-seas catch. Other countries exhibit annual profits ranging from
negligible to $250 million, which were increased substantially by subsidies
(for example, Japan, Korea, Spain, and the United States). Surface fisheries
for pelagic species such as tuna were profitable, whereas most other fisheries
barely broke even, and squid jigging (mostly concerning Chinese and Taiwanese
fleets) and deep-sea bottom trawling were generally unprofitable without
subsidies. Some national fisheries in specific regions were unprofitable even
after government subsidies are taken into account.
Overall,
we conjecture that fishing the high seas could become rational for the most
unprofitable fisheries due to a combination of factors including the following:
(i)
currently available catch data continue to
underrepresent real catches,
(ii)
vessels fish only part of the time in the high
seas and make most of the economic benefit from fishing in EEZs,
(iii)
government subsidies not accounted for in this
analysis,
(iv)
reduced costs because of unfair wages or forced
labor, and
(v)
reduced costs because of transshipment at sea.
There may be additional market factors that
are fishery-specific, that is, squid fishing by Chinese vessels in South
America. Our results suggest that this fishery is unprofitable, but over 100
Chinese squid jiggers amass in January at the limit of Argentina’s EEZ to catch
small Illex squid, before
Argentina opens the season inside its EEZ. The low stock size and high demand
for squid may allow Chinese companies fishing early in the season to charge
higher prices. To these factors, we could add geostrategic reasons, where
countries may fish in some regions as part of their long-term foreign policy
strategy, regardless of the economic benefit. Examples of this strategy have
been documented for Chinese and Russian fleets fishing in Antarctica.
(Science Advances June, 2018)
The statistics of high seas fishing is very alarming, and a bit tragic. It definitely shows that fishing in the high seas is a problem. I guess the easiest way for governments is to subsidies it, just to make sure that we’ll have our fish to eat, because the fishery organizations would run out of business otherwise and not supply us with fish. I guess this problem is similar in some ways to the agricultural problem. By 2050, we will have 10 billion mouths to feed on earth, and the fish will not exactly have this in mind and generate a higher population growth rate. Same thing with agriculture, we cannot just spread out more and more farms horizontally, chopping down forests that are essential for the environment, and using up huge amount of resources for food production. I think the answer lies in effectiveness and innovation. Just as start-ups have started with vertical farming, having farms indoor that does not take up too much space, need less water, and are not affected by weather – we need to innovate the fishing industry. Is fish farming a solution?
ReplyDelete// Nils Erik Molin
It is no surprise that fishing has become a very common job, activity, and hobby. The problem is that we are overfishing- this means that the loss of species will have a strong affect on the entire ecosystem and could lose a valuable food source. Putting government subsidies on fishing is a very extreme solution, although it might be the most necessary one. If this excessive fishing behavior continues, at some point fish will become scarce and the entire food system will be impacted.
ReplyDeleteAlmira Ardolic
What are the economics of fishing the high seas? Well to me it seems as the though the economics are that of it becoming a sought after occupation for a myriad of people. This in turn has led to what can be called over fishing. It's a shame that this happens because eventually it could lead to the extinction of some of the earths supply. Government subsidies, notably 4.2 billion dollars in subsidies has been a factor in this scenario. It was very eye opening reading this document and I'd be interested in checking in again down the road to see where the situation stands.
ReplyDeleteHigh Sea fishing has become common overtime due to many factors and it is alarming that this has occured but overtime it has also become a global revenue generator. This is due to the need to fish is causing governments to subsides the cost of fishing. Without this subsiding our food supply would be decreased because most of these high sea routes are usually seen as unprofitable with out the subsides
ReplyDeleteHernan Balbuena
It surprises me that a lot of people attack vegans/vegetarians when it comes to meat production but not a lot of people are aware of the impact of fisheries. This is a topic that needs to be more explored and I agree that the addition of subsidies may help increase the understanding of this topic. When it comes to high sea fishing, I was always confused on the subject. I never understood how fishing really made that big of an impact. Growing up I never ate fish however my family would always go fishing. My question now would be what is the impact of the people who fish then throw the fish back in the water? Would subsidies be added to them? Is this still added to the data? How does one really account for the people who farm their own fish?
ReplyDeleteThese are questions I never really thought until now. I believe that adding on subsidies will indeed create a better environment economically and in the sea.
Marta Krawczynski
The content of this article is surprising. I always thought that the fishing industry was a very profitable industry, but I did not expect that more than half of the fishing industry's profits would be based on government subsidies and low labor wages. It is very important to find out the reasons for the loss of fishing on the high seas and to come up with corresponding solutions. After all, the development of an industry cannot rely on government subsidies and lower labor wages for a long time.
ReplyDeletema xue
The fishing industry has been fighting an uphill battle for many years dues to many external factors that contribute to coming in far under the profit goals of the company, and the damage done to the environment due to the overfishing on areas around the world. The article did not surprise me in the way it described how the fishing of the high seas in very difficult in the sense of turning profits. Government involvement to keep this industry is essential but is a notion that cannot be sustainable as the world’s population continues to explode. Much more innovation and advancements to the process must be achieved to not only turn profits but to feed the world. Based on the article at the current state on fishing we are highly likely to run into issues that plague the companies that are fishing and hurt food production across the globe. Overall the best way to find solutions to this issue is to work toward innovation and push the envelopes to find ways that will benefit these companies and help keep up with food productions.
ReplyDeleteThe fishing industry has been demonstrated for many years and is important in our economy today. Yet, there is a chance that with an extensive amount of high sea fishing we will result to no more marine habitat left to fish. Reading from this article, it is understandable that subsidies are an important factor for high sea fishing. It doesn't neccesarily present us with the fact that it is profitable but it does does show that it lowers the marginal cost of fishing. Japan is found to have the highest global subsidies of 20%. The fishing industry has become a serious business propostion that encounters a lot with government laws and just overall the government itself taking over. I also learned from this article that tuna and shark is a high value fish and is found to be the most profitable but what if that all disappears. With the amount of fishing that occurs from different countries and especially with what the environment is going through there might be less to fish and less profits to occur in this industry.
ReplyDelete-Nicole Katsnelson
The statistics on fishing are extremely alarming. The overfishing is creating a deficit that the natural fish population cannot keep up with, and while the fish markets are continuing to be able to supply food for people all across the globe- by 2050 when 10 billion people are expected to be alive- there may not be any (consumable) fish left to fish for. Also fishing itself is an extremely costly extraction- because of the variable weather conditions and unpredictable nature of the seas, and all of the necessary equipment required to procure fish. Also if only tuna and shark fisheries are making profit worth anything, what are the ways in which governments can sanction the fisheries causing more to the environment for little to no profit? Based on the article I think the dilemma of the fish industry also falls into the overall category of the world's food waste problem. (At least in the first world.)
ReplyDeleteLike we learned about in chapter four of our textbook, the ocean fishery atmosphere is difficult to generally regulate because it is an open-access resource. Over-fishing has become a tragedy of the commons, or as our textbook explains, “the tendency for common property resources to be overexploited because no one has an incentive to conserve the resource while individual financial incentives promote expanded exploitation.” The figures presented in this article prove that without subsidies, most fisheries are barely profitable, with tuna and shark fisheries being the exceptions. Furthermore, present exploitation rates are unsustainable. Over-fishing is another example of the ways humans act as if we live in an infinite world, even though our resources are limited. If companies place more of an emphasis on shark and tuna fishing, the ocean’s ecosystem will be further disturbed, which is significant because the ocean’s ecosystem needs both types of fish to regulate itself. Although subsidies seek to ensure commodities remain at competitive prices for consumers, I believe subsidies in places that are already over-fished/exploited are not as beneficial as they could be if they were allocated to other industries, like the development of sustainable foods and products. With the technologies that allow meat to be developed in a lab, maybe there is a way for nations that rely on fishing for the majority of their imports/exports and contribute so much to their culture to still have fish without the added externalities to climate change and the oceanic ecosystem.
ReplyDeleteHi Meredith,
DeleteI found your blog post about overfishing and the tragedy of the commons to be extremely helpful in understanding this week's blog.
Thanks,
Christine Lin
Because it is extremely hard to regulate a resource that everyone has access to, overfishing has become a major environmental problem. Although the behavior is still unacceptable, it would at least make it slightly understandable if it made economic sense. However, in order for most sectors of the industry to by profitable it requires a tremendous amount of government subsidies. Even the most profitable fishing markets, sharks and tuna, can only make money if there are animals to fish. Currently, fish populations are unable to reproduce fast enough to keep up with our fishing rates. As our population inevitably grows, it will make this imbalance even worse and make government subsidies even more unsustainable.
ReplyDeleteAs stated in Chapter 4, "fisheries in the open ocean are typically open-access resources." The government subsidies of high-seas fishing exceeds the net economic benefits. Without subsidies, the global scale of fishing would decrease due to a decrease in profits and an increase in labor costs. Data shows that fishing unprofitability would increase to 54% if subsidies were taken away and the cost of labor increased -- more than half of the fishing grounds would be unprofitable at these exploitation rates. Large fishing subsidies are seen in Japan, China, South Korean and the United States. These subsidies lower the marginal cost of fhishing which increases high-seas fishing activities in these countries. Besides fishing of tuna and sharks, other fisheries lack profitability without subsidies from the government.
ReplyDeleteDue to increase fishing due to govermental subsidies, some species have been overfished to the point of near extinction (e.g. Atlantic cod). In consequence to overfishing, there are increases on ocean habitat distruction due to the harsh methods of extracting bottom-dwelling fhish and other underwater animals. This act depletes the habitat of oxygen, causing large areas to be uninhabitable. The fish population's ability to replenish itself is damaged, and we have the makings of both an economic and an ecological collapse. In the chapter, it states that overfishing ultimately leads to the elimination of profits and the distruction of natural resources. The leads to the phenomenon referred to as the tragedy of the commons.
tragedy of the commons: the tendency for common property resources to be overexploited because no one has an incentive to conserve the resource while individual financial incentives promote expanded exploitation
The government must discourage overfishing. Policy options include license fee and instituting a quota (catch limit). Quota include individual transferable quotas (ITQs can be solde to someone else) and governmental auction of fishing quotas. In the case of overfishing, goverments need to decrease subsidies and increase the cost of fishing to achieve an economically efficient and ecologically sustainable solution.
I used Chapter 4 in our Environmental and Natural Resources Economics: A Contemporary Approach textbook as well as the below link for reference in my blog post.
https://www.environmentalscience.org/environmental-consequences-fishing-practices
- Christine Lin
This post definitely caught me by surprise. After reading Chapter 4 I have been informed that overfishing is currently happening. Diminishing return is happening and soon, there will be no fish to catch at all. It is hard to regulate public space and I am not sure how that can technically happen or if It will at all. Tragedy of the commons is an issue because that property belongs to no one and rarely concerns anyone. The same people who root for veganism and vegetarianism are the same people who should also root for the lives of sea animals. They are animals as well and can also go instinct. They are also a part of the food chain and economy.
ReplyDeleteAs we learned in Chapter 4, a good example of a common property resource is an ocean fishery. Fisheries in the open ocean are typically open-access resources that are not governed by private, traditional, or government management systems. An open-access resource is a "common property resource that lacks any system of rules governing its use" (Harris & Roach, p. 88). Anyone can fish in nonterritorial waters, which poses a problem. No one owns actually owns the resource (wild stock of fish). When there are no rules that limit use, the resource is open access, which means that anyone can use it without restriction. This leads to overuse of the resource and sometimes to the collapse of its ecological functions. The level of use of an open-access resource that results from a market with unrestricted entry is known as open-access equilibrium. This level of use may lead to depletion of the resource. When it comes to the high seas/open oceans, there are so many boats in operation. Stocks of fish are being depleted. "The fish population's ability to replenish itself is damaged, and we have the makings of both an economic and an ecological collapse" (Harris & Roach, p. 89).
ReplyDeleteOverfishing of the oceans is a classic case of the "tragedy of the commons." Since there are no restrictions on access to fisheries in the open ocean, economic incentives lead to an excessive number of boats in operation. "Because common property resources belong to no one in particular, no one has an incentive to conserve them. On the contrary, the incentive is to use as much as you can before someone else gets its." (Harris & Roach, p. 94).
About 58% of the world’s ocean is legally defined as high seas. The remaining 42% are national waters, also called Exclusive Economic Zones (EEZs). There are 150 EEZs surrounding the world's continent and islands.The high seas are often described as a “free for all,” and in a typical tragedy of the global commons, they are overfished. Only a few countries control the global commons.
Some have argued that the best thing to do is to put a ban on global fishing in the high seas. Marine biologist and professor, Daniel Pauly, argues that an end to high-seas fishing would in effect create a vast marine protected area in nearly two-thirds of the world’s oceans, allowing fish stocks to rebuild and giving many "less-developed coastal nations a fair share of fisheries resources" (https://e360.yale.edu/features/a-global-ban-on-fishing-on-the-high-seas-the-time-is-now).
-Jennifer Torsiello