IEA releases report on what fisheries policy should look like outside of the EU
Subsidies have encouraged overfishing by increasing the size of the fishing fleet. Regulations set in place to counter these effects have driven up costs without reducing fishing levels. Quotas set under the CFP have also led to huge waste – between 1990 and 2000, over 500,000 tonnes of fish were discarded each year in the North Sea alone.
The solution to overfishing lies in establishing property rights and tradable quotas. Without these there are no incentives for conservation, resulting in the drastic depletion of fish stocks we have seen. Such a system has been used in Iceland over the last 40 years with great success, improving both productivity and sustainability.
A new report from the Institute of Economic Affairs argues that subsidies for the fishing industry should be phased out and replaced with market mechanisms to protect fisheries.
Failure of government policy in fisheries
- Subsidies are largely to blame for declining fish stocks because they encourage overfishing and undermine the feedback mechanisms that help protect fish stocks (in Europe an estimated 63% of fish stocks are overfished in the Atlantic and 82% in the Mediterranean).
- Subsidies shield fishing businesses from the consequences of bad decisions and encourage risky investment.
- State support in this guise has kept loss-making fishing enterprises in business, creating overcapacity.
- Regulations and control systems are also ineffective in preventing overfishing – for example, limits on vessel size only encourage investment in more boats and specifying certain days you can fish encourages intensive fishing on those days.
Recommendations for new policy
- Phase out ineffective and costly subsidies
- Remove indirect subsidies such as grants for harbour improvements and transport links – infrastructure should be operated on a commercial basis.
- Reduce regulatory barriers to enable consumers to substitute depleted species for similar farmed fish.
- Refrain from imposing state regulation on inshore fisheries.
- Where state action is unavoidable, limit intervention through creation of property rights, such as individual transferable quotas.
- With tradable quotas, trawler owners would have a tradable right to a given share of a total catch – they would then set the optimal catch each year as they have an incentive to ensure stocks are preserved.
Commenting on the report, Dr Richard Wellings, the editor and Head of Transport at the Institute of Economic Affairs said:
“The decline of the fishing industry and disastrous exploitation of fish stocks has largely been down to the failure of the EU’s Common Fisheries Policy. Pumping vast subsidies into the sector has been counterproductive as they increase the size of the fishing fleet, opening the door for more trawlers to exploit free-for-all stocks. But Brexit provides a golden opportunity for the UK to regain control of its fisheries policy and look to market-based mechanisms such as introducing property rights in order to promote sustainability and productivity in the industry.”
Notes to editors:
For media enquiries please contact Nerissa Chesterfield, Communications Officer: firstname.lastname@example.org 020 799 8920 or 07791 390 268.
To download the report, Sea Change: How markets and property rights could transform the fishing industry, please click here.
In September 2016, the IEA released a briefing paper on what UK fisheries policy should look like outside of the EU. To download this click here.
The mission of the Institute of Economic Affairs is to improve understanding of the fundamental institutions of a free society by analysing and expounding the role of markets in solving economic and social problems.
The IEA is a registered educational charity and independent of all political parties.