Europe Revision: Fishing

Revision notes on aspects of the common fisheries policy of the EU and the crisis in the industry

• This is an industry in crisis made worse by policy failings
• And the crisis may well have been made worse by deficiencies in the EU’s own common fisheries policy (CFP)
• At the heart of the problem is overfishing – the ‘tragedy of the commons’ - 30% of EU fish stocks are beyond safe limits.
• EU quota system does not work well in restoring fish stocks
• EU fishing sector suffers from overfishing, fleet overcapacity, heavy subsidies and decline in the volume of fish caught.
• Declining industry creates structural problems for many EU regions
• Environment aspects of industrial and ocean fishing are important too
• Questions might consider the nature of market and government failure and options for protecting the industry and giving it a sustainable future

The major challenge facing the Common Fisheries Policy (CFP) is to strike a sustainable balance between the available marine resources and their commercial exploitation. Fish stocks have been falling and permanent, irreversible resource depletion may have already occurred because of over-exploitation and the government failure of EU fishing policy. Over-fishing in the EU has lead to smaller stocks, reduced landings and declining incomes for producers but higher prices for consumers.

Over-fishing is a cause of market failure arising from a failure to enforce agreed fishing quotas and the absence of enforceable property rights for what is perceived to be a common ownership of a natural and renewable resource.

CFP and government failure

1. CFP sets maximum quantities of fish that can safely be caught every year
2. CFP has been criticised for poor monitoring and enforcement. It is a good example of government failure.
3. In 2007 the European Court of Auditors declared that CFP was failing as a policy with consequences for the long term future of the European fishing industry.
4. Maximum quantities, called total allowable catches are divided among Member States. Each country’s share is called a national quota – there is always intense political pressure for countries to seek an increase in their own allowable catch.
5. Trawlers arriving at port with more fish than they are allowed dump the excess at sea worsening the problem of falling fish stocks
6. Extra EU funding is available for the modernisation of the fishing fleets as well as for getting rid of excess fishing capacity by encouraging some fishing businesses to leave the industry.

Policy options for giving fishing a sustainable future

Options include

1. Ending financial subsidies for building new trawlers + transitional payments for fishing crew members to leave the industry move into alternative employment
2. Limiting the number of days fishing vessels spend at sea
3. Putting fish spawning grounds out of bounds to allow the fish to reproduce
4. Enforcing regulation that requires fishing vessels to use nets with larger mesh sizes or special panels to let juvenile / smaller fish escape. Many want ‘bottom-trawling’ to be banned – this is where heavy rollers are dragged across the ocean floor, ripping up everything in their path.
5. Establish ‘no-take marine protected reserves’ or National Parks of the Sea
6. Encourage a system of tradable quotas similar to the system employed in Iceland where there is an annual allowable catch rate of 25% of the fishable stock – permits are issued on that basis. Of course if stocks increase, so too can the annual catch allowed under this system – this gives the right incentives to fishing businesses to operate within the traded permits system. There is an active market for catching rights and their price is determined by current supply and demand.