Fisheries sector plays in supplying food and a source of livelihood for especially people in developing countries. Therefore, many countries subsidize their fishing industries to protect their food supply. In the world, the annual subsidies are $10 to $15 billion - possibly more than 25 percent of the annual $56 billion trade in fish. Hence, we can realize how prevalent subsidizing fishing industry is in the world.
There are many forms of subsidies:
Direct government payments to the industry
- a diverse range of subsidies as grants made for the purchase of new fishing vessels, vessel decommissioning payments (buybacks), fishermen's unemployment insurance, compensation for closed seasons, equity infusions, and price support programmes
- Grants for the purchase of new fishing vessels might be introduced to aid in the development of an indigenous fishing industry. Vessel decommissioning payments may be introduced to stimulate a process of reducing excess capacity. Fishermen's unemployment insurance may be introduced to stimulate fishermen to enter or remain in the industry. Compensation for closed seasons may be introduced to permit fishermen to remain in the industry when their incomes are unexpectedly cut because of measures introduced by governments to protect declining fish stocks. Equity infusions may be made to avoid the bankruptcy of fishing firms when the bankruptcy would have catastrophic effects on the employment of a region, particularly when the bankruptcy is caused by a temporary economic occurrence such as the decline of markets during a severe business recession. Price support programmes, whereby government pays producers the difference between market price and an administratively set target price, may be introduced to support fishermen's incomes.
- Tax waivers and deferrals
Some are harmful; some may help to solve the problem of overfishing. In view of this, WTO agreed on restricting subsidies designed to promote export and establish controls over other form of subsidies. However, certain countries, such as Canada, favors the "no-need approach" in which no restriction of subsidies should be imposed as they dispute the casual link between subsidies and overexploitation of fish resources. They propose fisheries management regimes deal with catch controls (quotas), effort controls (restrictions on boat size, engine power and days at sea, etc.) and right-based structures (permits, individual transferable quotas, etc.). Therefore, in Japan's view, it would be unfair if these varying situations are ignored and certain fisheries subsidies automatically prohibited.
Other countries propose the Traffic Light approach: red (forbidden subsidies), green (permitted subsidies), amber (slow down, which means that subsidies may be subjected to a complaint on the basis of their adverse trade effects). By this approach, desirable subsidies will be maintained while direct payment to promote export would be banned or discouraged.
Here are some links on information concerning subsidies on fisheries
http://www.oceansatlas.com/world_fisheries_and_aquaculture/html/issues/govern/subsi/default.htm
http://www.asil.org/insights/insigh136.htm
http://www.fao.org/DOCREP/006/Y4647E/y4647e06.htm