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“Bad and ugly,” fishing subsidies

The investment of the federal government in the fishing industry isn't promoting a sustainable activity, according to experts
“Bad and ugly,” fishing subsidies
Fishing vessels - Photo: Iniciativa dataMares
18/04/2018
12:46
Mexico City
INICIATIVA DATAMARES*
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In the best Clint Eastwood fashion, this story is about the fishing industry in Mexico and its “bad and ugly,” characters who stand out for being the protagonists of this tale which begins like this:

The Luna fleet was born in the shores of Sonora, in Peñasco Port. The manager is Cristino, the only member of his family with a college degree and the who keeps tabs on the expenses for shrimp, hale, and the catch of the day.

Fishing in Mexican waters implies spending on food, ice, oil, wages, and spare parts but above all, fuel. In a month, fishing boat engines consume 126,000 liters of marine diesel, that is, over MXN$ 2 million – the most taxing expense.

To promote fishing, the federal government provides subsidies. For every liter of marine diesel, the government pays two pesos per liter, less than a quarter of a dollar. Without this support, Cristino and his family wouldn't be able to keep their company afloat. In the southern end of the Pacific coast, in San Carlos Port, Baja California Sur, artisanal fisherman Arturo Aguilar has no work permit and lives on uncertain wages. His house is made of wood sheets and fiberglass plates.

Arturo, 57, only received this subsidy once, during the close season. Since then, according to him, subsidies aren't given to “screwed fishermen.” Both men are victims of a structural fault in the fishing industry: an uneven management of subsidies and the lack of clarity in the objectives of the fisheries administration. In other words, “no strategy,” according to experts.

Between 2008 and 2015, Mexico's National Aquaculture and Fishing Commission (CONAPESCA) gave MX$ 2.5 million in subsidies every day, that is, over MXN$ 7 billion in total. Of this amount, 38% was used in “bad and ugly” subsidies which contributed nothing to sustainable fishing (economic, environmental-friendly, and social), according to Iniciativa dataMares, an alliance between scientists and journalists of EL UNIVERSAL.

fishermen.jpg
(Fishermen - Photo: Iniciativa dataMares )

Who wins?

International economists classify subsidies in terms of one of Clint Eastwood's westerns: “good, bad, and ugly.” Rashid Sumaila, a researcher at the University of British Columbia in Canada, classifies subsidies as “good” when they focus on productivity without exceeding catch rates; “bad” when they are given without controlled processes; and “ugly” when the results are unknown.

The example of the most expensive “bad and ugly” subsidy is the one given for fuel, with a 38.32%, since it promotes uncontrolled catches and permits the operation under the perception of profitability – that is, that a company is sustainable.

In Mexico, the latter kind of subsidies are the ones which reign supreme even if this macroeconomic dilemma is present in other parts of the world. Therefore, in 2001, Mexico and several other countries agreed to eliminate all grants and subsidies in the fishing industries, as part of the Doha Development Program of the World Trade Organization (WTO), as grants “distorted trade.” The commitment will enter into effect by 2020. There are two years before the deadline of the established goals and the federal government keeps granting “bad and ugly” subsidies without implementing a strategy to remove them or refocus them through the scope of a federal public policy.

“Subsidies aren't for the sustainability of fishing, they exist for political control and for the benefit of interests that, in many cases, are protected by corrupt processes,” accuses Senator Ernesto Ruffo, head of the Fisheries Commission at the Upper Chamber.

Gasoline and diesel

Fishing vessels, like Cristiano's, or fishing boats, like Arturo's, depend on one of the subsidies of the Sector Plan for Fisheries, Food, and Agriculture Development 2013-2018.

According to exclusive data of Iniciativa dataMares obtained pursuant to the Transparency Act, between 2008-2015, CONAPESCA granted MXN$ 7.4 billion in concepts such as power, fisheries, and aquaculture, modernization of larger and smaller boats, environmentally friendly engines, equipment, and infrastructure for fisheries. Between 2011 and 2015, the states which received most of the public funds were Sinaloa, Sonora, Tamaulipas, Campeche, and Tabasco.

Fuel concept breaks down into marine diesel – used by the industrial fleet – with an average value of MXN$ 2.7 million per year and an annual average of MXN$ 415 million; and in riverine gas for artisanal fleets, with MXN$ 781 million and MXN$156 per year. The distribution is noticeable when the production value of artisanal fishing is 2.5 times larger than the industrial one, and generates four times more catches per liter of fuel than deep-sea fishing, in addition that it generates more jobs.

According to the report Reforming Fisheries Subsidies, by the World Wildlife Fund (WWF), close to 20% of the global fishing subsidies are granted for fuel.

Humberto Becerra, president of the National Chamber of Fisheries and Aquaculture Industries (CANAINPESCA), states that fuel subsidies are necessary for food sovereignty and low-cost healthy products, although they require a price capable of competing with international markets.

For his part, Miguel Ángel Cisneros Mata, of the National Institute of Fisheries and Aquaculture (INAPESCA) considers that subsidies aren't the problem per se but that it is counterproductive to invest in fuel. “The longer you fish, the more fuel you use, which translates into larger catches and impacts on sea populations,” he explains.

For Miguel Ángel Ojeda, a researcher at the Autonomous University of Baja California Sur, the high cost of fuel subsidies doesn't have a relevant impact. “What will happen to all the people who depend on the subsidies the moment the government can no longer afford them?” he ponders.

EL UNIVERSAL has been trying to reach CONAPESCA since August 2017 for this article, yet, as this edition went to press, CONAPESCA didn't reply to any of our interview requests. The Ministry of Agriculture, Livestock, Rural Development, Fisheries and Food (SAGARPA) didn't reply either.

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(Catch of the day - Photo: Iniciativa dataMares )

Exhaustion of companies & a necessary reform

Without subsidies, fishing firms won't be able to support themselves, according to interviewed workers. For experts, the companies aren't profitable anymore as there is, according to them, overcapitalization and overexploitation.

Enrique Sanjurjo, WWF's public policy expert, criticises the practice of fishing receiving economic support to reduce costs as this causes less efficient companies to remain in the market, reducing competitiveness.

“Subsidies which increase your capacity only make things worse, it's a clear signal of overcapitalization and overexploitation,” adds Andrés Cisneros, research associate at Fisheries Economics Research Unit of the University of British Colombia.

The study Some Directives for the Reform of Mexican Fisheries, led by Cisneros, suggest a reform to the fishing industry has to cover socioeconomic aspects, the integration of mechanisms that add value to the product, and better technology. However, equipment and infrastructure costs at ports can only cover 7%, equal to MXN$ 519 million during the period 2011-2012. In this category, the states of Sonora, Guerrero, Baja California, Jalisco, and Michoacán stand out.

Javier Valdez, Managed of Deli Fisheries in Guaymas, Sonora, explains and questions: “Our vessels are old, made during the 80's or before. How are we going to compete with a fishing fleet of the United States with new vessels that consume less diesel?”

The 36% of the budget mentioned was to revamp large and small vessels between 2011 and 2015. For deep-sea fishing vessels, most from Sinaloa, Sonora, Yucatán, Tamaulipas, and Campeche, there was an expense of MXN$ 2.2 billion; river fisheries, mainly in Sinaloa, Yucatán, Michoacán, Jalisco, and Veracruz, received MXN$ 356 million. Engine replacement was the third most important concept, with MXN$ 1.2 billion – 17% of the total for the period 2008-2013. The entities which benefited the most were Sinaloa, Veracruz, Sonora, Baja California Sur, and Campeche.

Despite international commitments and scientific research, this is the current panorama. Interviewees agree the fishing sector needs to be reformed, which would imply restructuring subsidies.

Eduardo Rolón, executive director of Causa Natura, claims the programs have to have clear objectives, an exact goal to observe changes and modify it if necessary.

Searching for this change, Catalina López-Sagástegui, director of the Marine Program of the Gulf of California, emphasizes that it's necessary to invest in subsidies, infrastructure, and fixed costs that allow fishermen to generate an added value to their products and a lasting benefit.

“If you truly want to solve poverty in fishing and remove subsidies, reclaim your fisheries,” says Cisneros, co-writer of the study Strategies and Foundations for the Reform of Fishing Subsidies, which proposes a change based on over 30 global cases. The best results are obtained by refocusing subsidies to needs that don't belong to operational capacity. The best strategy, although the hardest one, is to remove “bad and ugly” subsidies to recover marine populations and stabilize fishermen earnings.

To make the above a reality, experts consider vital to establish clear objectives for the short and the long term, design a public policy according to the needs of fishing communities and implement it with transparency. Especially, it's necessary to have a strong social and political will.

*This article is part of the science journalism project promoted by Iniciativa DataMares (datamares.org), which seeks transparency, dissemination, and understanding of information for decision-making processes regarding the sustainability and conservation of the natural resources of the country.

The collaboration between journalists and scientists of several groups, particularly the Marine Program of the Gulf of California is the main axis of this project.

Article, photography, and video: Enrique Alvarado, Alejandro Melgoza and Andrés M. Estrada
Project Coordinator: Raquel López-Sagástegui
Director of the Marine Program of the Gulf of California: Catalina López-Sagástegui

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