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Persistent Subsidies in Fishing: How Will a Fuel Price Increase Affect Fleet Behaviour and Performance?

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  • This paper discusses the persistency of one of today’s major subsidy schemes in Norwegian fisheries: exemption from fuel taxes in the fishing fleet. The reimbursement scheme stems from the late 1980s, and has been persistent since, under different governments. Here we provide the background for this support and discuss it’s persistency against theoretical predictions on subsidies' effect on fishing behaviour. Also, we compare the Norwegian scheme against similar arrangements in neighbouring countries, in a comparable fashion. The Norwegian fishing fleet is heterogeneous with respect to oil consumption in transport and fishing operations. Hence, the effect of the fuel subsidies is different along different fleet components. The analysis compares the impact of an annulment of this scheme on two fleet groups, based on a sensitivity analysis. Finally we discuss the implications of abolishing this subsidy for the fishing fleet in general, different vessel groups and potential policy implications in the wake of such environmentally friendly action.
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  • Isaksen, J.R., Ø. Hermansen & O. Flaaten. Persistent Subsidies in Fishing: How Will a Fuel Price Increase Affect Fleet Behaviour and Performance?. In: Visible Possibilities: The Economics of Sustainable Fisheries, Aquaculture and Seafood Trade: Proceedings of the Sixteenth Biennial Conference of the International Institute of Fisheries Economics and Trade, July 16-20, Dar es Salaam, Tanzania. Edited by Ann L. Shriver. International Institute of Fisheries Economics and Trade (IIFET), Corvallis, 2012.
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  • AQUAFISH, USAID, NEPAD Planning and Coordination Agency, Norad, The World Bank, Hyatt Regency Dar es Salaam, NAAFE, World Wildlife Fund, United Nations University Fisheries Training Programme, ICEIDA, JICA, JIFRS, The European Association of Fisheries Economists, International Seafood Sustainability Foundation
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