It is more fish, not fuel subsidies, that will support UK fishing fleets

Photo credit:   4BlueEyes Pete Williamson

May 10, 2013 // By: Griffin Carpenter

As EU Ministers prepare to determine the shape of a new Common Fisheries Policy, a key issue is how best to support EU fishers. Based on UK data from the SeaFish annual statistical report – the most recent report was published last month – the government’s current policy of fuel tax concessions is both inefficient and perverse. What is actually needed is a Common Fisheries Policy that aims to replenish fish stocks.

UK fleet data shows an industry in flux. Number of crew, quantity of fish landings, days at sea, profits – the variables can be up one year and down the next. Yet despite all this variance there is one clear trend: the ever-increasing importance of fuel consumption as a cost for fishing vessels regardless of vessel size, category, or location.

Another worrying trend from the fuel use data is the quantity of fuel consumed per day at sea. There appears to be no improvements in fuel consumption intensity over 2005-2012.

But if fuel costs are an increasing burden to fleets of fish vessels, why have there been little gains in fuel efficiency and productivity? The answer lies in the 9¢/litre fuel tax concession which approximates 6% of total landed value in the UK. Although some EU countries have an even higher absolute fuel tax concession, the UK subsidy is 61% of total governmental financial transfers, one of the highest rates in the OECD.

Government financial transfers can be used to steer industries in a desired direction, but in the UK the push is away from energy efficiency and fuel-saving measures for UK fleets. This push is jeopardizing long-term cost-savings that could occur in the industry. Studies have noted that technological and/or operational improvements could improve energy efficiency in fisheries in the range of 5-50%.

Taken in whole, this fuel tax concession acts as a triple loss for the UK economy.

First, the fuel tax concession buffers against a significant cost and thus contributes to overcapacity – the major cause of overfishing – by keeping inefficient fleets fishing. Overcapacity results in lost revenue because if fish stocks were to replenish they could be sustainably harvested from a larger stock.

Secondly, by acting as a buffer the fuel tax concession removes the focus from the cost of fuel and thus stifles innovation and contributes to greenhouse gas emissions.

The third economic loss is that these fuel tax concessions come from the public purse and cost society when other projects – including those focused on sustainable business alternatives for fishery communities – are underfunded.

Overcapacity, greenhouse gases, and tax dollars – fuel tax concessions have a lot to answer for. But the true folly of subsidised fuel for the UK fish fleet is that only more fish can act as true support for UK fishers. If UK Fisheries Minister Richard Benyon wants to protect UK fishers in he must act with other EU ministers to initiative legislation based on biological limits and restoring fish stocks.

Issues

Fisheries

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