Fisheries Subsidy in an LDC: The Case of Marine Fisheries Sector in Bangladesh

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Fisheries Subsidy in an LDC The Case of Marine
Fisheries Sector in Bangladesh
By
Fahmida Khatun Mustafizur Rahman Debapriya
Bhattacharya
April, 2004
CENTRE FOR POLICY DIALOGUE (CPD) B A N
G L A D E S H
a c i v i l s o c i e t y t h i n k t a n
k
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ISSUES FOR DISCUSSION
I. Marine Fisheries Sector in Bangladesh

• Trade Policies for the Fisheries Sector
• III. Estimation of Exploitation Status of Marine
  Fisheries
• IV. Policies to Promote Sustainable Management
• V. Implications of the Study Findings

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• MARINE FISHERIES IN BANGLADESH
• Enormous potential for marine fisheries sector in
  Bangladesh
• 710 kilometer long coastline
• Accounts for 20 of total fish production
• 5 trawl fishing, 95 artisanal fishing
• Annual growth of production about 4 during
  1990s
• Export of frozen fish is a prominent economic
  activity
• Employment increased at 5 per annum during
  1990s
• around 1 million families directly involved

 V. Policies to Promote Sustainable Management of
the Marine Fisheries in Bangladesh
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• TRADE POLICIESIN BANGLADESH
• 2.1 Bangladesh - An Active Trade Policy Reformer
• reduction in the tariff levels
• narrowing of dispersions in the tariffs
• withdrawal of import bans
• withdrawal of import quota restrictions
• 2.2 Effect
• Reduction in tariff rates
• Reduction in a number of commodities under quota
  restrictions
• Real growth of the export sector
• Structural shifts from traditional to
  non-traditional exports
• Created a conducive policy environment favouring
  export
• oriented activities

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2.3 Trade Policy for the Fisheries Sector

• Marine fisheries sector promoted through general
  policy support
• Rise of frozen food exports is a direct outcome
  of trade policy
• Direct support for marine fisheries in the form
  of subsidies etc. negligible
• Amount of subsidy has not undergone any change
  over years

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• III. ESTIMATION OF EXPLOITATION STATUS OF THE
  MARINE FISHEREIS IN BANGLADESH
• 3.1 Methodology
• Historical Review discussion on the policy
  evolution, regulatory framework, the intervening
  factors and the consequences
• Statistical Analysis quantitative techniques to
  examine sustainability of the sector
• Participatory Approach consultation with a broad
  cross-section of stakeholders

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• 3.2 Data Base
• Primary
• Field level data from four marine fishing sites
• Debriefing of leaders of the trade bodies
• - Bangladesh Marine Fisheries Association
• - Bangladesh Frozen Food Exporters Association
• - Chittagong Chamber of Commerce and Industries
• - Apex Foods(a leading private enterprise)
• Secondary
• Bangladesh Bureau of Statistics
• Ministry of Fisheries
• Department of Marine Fisheries

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Table 4 Estimation Results
MSY 642,130 tonnes Actual Yield, 1998 310,000 tonnes
Effort At MSY 101,442 horsepower Actual Effort, 1998 71,184 horsepower
Total Cost at MSY US 337.7 mln
Total Revenue at MSY US 648.8 mln
Economic Rent at MSY US 311 mln
MSY Yield per unit of Effort 6.32 tonnes Actual Yield per unit of Effort 4.35 tonnes
MSY Rent per unit of Effort US 4.27 mln Actual Rent per unit of Effort US 3.9 mln
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3.3 Study Findings

• - Yield level has not reached MSY
• - Applied effort is also lower than MSY level
  effort
• - Derived total revenue at MSY is much higher
  than total cost
• General incentives package have no
  detrimental effect on fishing
  practice
• - Still large scope for applying more efforts
  in the exploitation
• as well as development of the sector

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IV. POLICIES TO PROMOTE SUSTAINABLE MANAGEMENT OF
MARINE FISHERIES IN BANGLADESH

• Assessment of the sector
• Integrated approach
• Emphasis on small scale fishing
• Support for infrastructure development
• Monitoring, control and surveillance
• Smooth operation of licensing system
• Regional cooperation
• Capacity building

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• V. IMPLICATIONS OF THE FINDINGS
• (a) Classical example supporting the
  counter-factual proposition - in the absence of
  market distorting subsidies or preferential
  fishing agreements, the country may improve its
  foreign revenue from exports and still maintain a
  sustainable stock
• (b) Impact of the Study
• Poverty Reduction Strategy (PRSP) Importance on
  natural resource
• Fisheries Sector Review 2003 A no. of policies
  suggested
• New Fisheries Project 9 new projects with
  emphasis on
• Community based, livelihoods aspects,
  environmental dimensions
• Awareness of the stakeholders including the
  associations

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(c) Follow- Up by CPD - Study on Fish Trade
Liberalisation - Suggestion in the advisory
committee of the WTO cell at
the Ministry of Commerce, GOB - Member of the
advisory committee at the Ministry of
Agriculture - Consultation with the
stakeholders