How Government Subsidies Caused Overfishing and Why Governments Need to Scale Back

Throughout history, fish have been caught and eaten by humans because fish can be a good source of protein and other nutrients. As important as they are to multiple cultures, we are reaching quite the dilemma with fishing, mainly that of overfishing. Overfishing is when the number of fish removed from all the bodies of water is greater than the species' ability to reproduce and replenish the losses. This is not to be confused with overfished, which is "the condition of a fishery that occurs when the spawning stock biomass of the fishery is below the level that is adequate for the recruitment class of a fishery to replace the spawning class of the fishery." So think of overfishing as a more extreme version of overfished.  

According to the Food and Agriculture Organization (FAO), 64.6 percent of fishery stocks were at biologically sustainable levels in 2019. This figure was 65.8 percent in 2017 and 90 percent in 1970. This means that 35.4 percent of fisheries are experiencing overfishing. As we can see below from data compiled by Oxford University, the percent of unsustainable fishing practices has increased since the 1970s. 

It is true that an increase in the global population attributes to overfishing, which helps increase demand. At the same time, the libertarian Mercatus Center reminded me with a recent article in its Discourse Magazine that there is a major culprit driving the overfishing: government subsidies. The United Nations Conference on Trade and Development (UNCTAD) found that governments around the world spend $35 billion on fishing subsidies annually, and that $20 billion of those subsidies contribute to overfishing. An article in Marine Policy estimates that to be about $22 billion, $13.9 billion of which is from Asian countries (Skerritt and Rashid Sumaila, 2021). China, Japan, and South Korea are responsible for 44 percent of these subsidies on a global level. 

Another article in Marine Policy shows the types of fishing subsidies (Rashid Sumaila et al., 2019). The harmful subsidies in question here are the ones that focus on "capacity expanding" activities, including building fishing vessels and fuel subsidies for fishing fleets. It does not surprise me to see such subsidies contributing to overfishing. This is what happens when a supply-side subsidy is at work. As we see in the supply and demand chart below, a supply-side subsidy has two main effects aside from costing taxpayers money. The first is that it increases the quantity consumed, which in this case means increasing fishing capacity. These subsidies also decrease the price of catching fish, which makes fish more affordable. In other words, the supply-side subsidies are causing overfishing to take place. In 2014, I brought this up with how we subsidize water with supply-side subsidies. The prices remain low and all the while, we are draining a value resource all the quicker. 

If overfishing is so bad for marine environments, why do governments shell out so much money? As a 2018 article from Science Advances shows, 54 percent of high seas fishing would not be profitable without government subsidies. Since coastal fishing communities do not see the same level of economic development as urban areas, governments see these subsidies as a way to support local economic development and the country's food chains.  

This might sound like a noble cause, but it is quite short-sighted. Not only does it wreak havoc on our marine ecosystems, but it also helps us make sure that we do not have sustainable fisheries in the long-run. How do we deal with this debacle? Like a "good libertarian," a big part of my response is for the government to get out of the way since it is government that attributes to the overfishing. I am not the only one who thinks that government is the cause. The World Trade Organization is working on a treaty to help reduce these subsidies that induce overfishing, which is certainly warranted in this case. In 2014, I covered another idea that would help with sustainable fishing: property rights for fisheries. By focusing on less government and more market-based solutions, we can help save our marine environment.