8. As background to the discussion, the Secretariat introduced document TC SUB/2004/2, A Global Technical Initiative on Fisheries Subsidies, and its complement document TC SUB/2004/Inf.3, A Summary of Recent Work on Subsidies in the Fishing Sector. These documents describe the relationship between subsidies and their effects on over capacity, IUU fishing and sustainable development and present a review of the attempts that have been made internationally to resolve them. The Secretariat remarked that, due to a lack of adequate budgetary funds, FAO planned case studies to provide empirical information on these relationships could not be implemented.
9. Many delegations commented on their national experience with the use of subsidies in the fisheries sector. Several delegations noted that their subsidies were mostly for general services and fisheries management, with a benign effect on fisheries. In addition, several delegations noted that they have stopped subsidising the fisheries sector. However, others, particularly developing countries, felt that they would benefit from the use of subsidies that would lead to the sustainable development of their fisheries sector and social wellbeing of remote coastal communities.
10. Some delegations noted a pressing need to understand the nature and extent of links between subsidies and overcapacity. Delegations shared views on those areas where the links were viewed as most direct, such as payments to vessels and their construction, as well as others where the link was less clear. The production of Technical Reports on this aspect as well as the dissemination of information on best practices, and provision of fora for discussion by member countries and intergovernmental organisations were examples where FAO had a competitive advantage.
11. Several delegations cautioned that a lack of systematic availability of quantitative information on subsidies may distort the results of analytical work. Increased transparency would be essential for successful outcomes. The Consultation was informed that several mechanisms exist to collect data on subsidies, such as the Organisation for Economic Co-operation and Development (OECD)’s subsidies database and the World Trade Organization (WTO) notification requirements for member countries. Some delegations considered that FAO should offer assistance to facilitate compliance with applicable notification requirements.
12. Some delegation noted that it was important to consider subsidies in aquaculture alongside those in capture fisheries.
13. The Consultation noted that the effects of subsidies vary depending on the nature and implementation of the management regimes, the state and nature of fish stocks, and the type and magnitude of subsidy and its duration. For instance, in a weak fisheries management regime and in the case of a fully exploited fishery subsidies would lead to overfishing.
14. The Consultation recognized that illegal, unreported and unregulated (IUU) fishing was strongly linked to overcapacity and urged FAO to closely examine the nature of the links between subsidies, over capacity and IUU fishing.
15. Many delegations noted that these relationships were complicated and compounded by a lack of information and, therefore, would benefit from further analysis to clarify the linkages.
16. Several delegations reminded the consultation of the importance of the small-scale fisheries sector not only in its contribution to national economy, but also as a source of food security, poverty alleviation, and livelihood support to fisheries-dependent communities. Therefore, the categorisation of a subsidy as “good” or “bad” was complicated by its dependence on overall development objectives.
17. Many delegations, particularly from developing countries, considered investment in exploratory research, harvest and post-harvest infrastructure, training and mechanisation of their artisanal fisheries as positive contributions towards improving food security and the livelihoods of fishing communities. They did not consider that subsidizing such investments had negative effects.
18. Some delegations provided examples related to small scale and artisanal fisheries where targeted subsidies had been used to encourage a shift away from environmentally harmful fishing practices. In some appropriate management regimes, concessionary duties on fuel, gear and fisheries equipment could serve to encourage small scale fishers to diversify their activities, for example, to underexploited fisheries.
19. Other delegates outlined, more generally and from their country experience, difficulties that over reliance on subsidies had caused, in terms of increasing overcapacity, fisheries overdependence, and possible difficulties in later fisheries reform.
20. The Consultation acknowledged the possible benefits of subsidies in developing small-scale fisheries and alleviating poverty in some fishing communities. In this respect, the Consultation recommended further examination of the effect of subsidies in small-scale fisheries, including understanding of the role of subsidies in fisheries development and an analysis of alternative, possibly better, fisheries management tools.
