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The Negative Impact of Government Subsidies on Small Fisheries and Fish Stock

Blog Post | Food Prices

The Negative Impact of Government Subsidies on Small Fisheries and Fish Stock

The state of the world’s oceans is made worse by government subsidies.

Summary: The oceans are in peril from pollution and overfishing, but government intervention is not the answer. In fact, government subsidies to the fishing industry worsen the problem by encouraging overexploitation and monopolization. This article argues that science and technology offer far better solutions for protecting the oceans and the fishing industry.

As most people know, the future of the oceans could be at risk from pollution and overfishing. The governments’ first instinct is to do what it always does: step in and assume responsibility for the problem. But is that always the right solution? Government intervention frequently does more harm than good. Rather than relying on politics to protect the oceans, we are better off leaving their future to science.

For example, take fishing industry subsidies. The fishing industry is hurting, with pollution and rising temperatures among the factors impacting the lives of commercial fishermen. In response, governments pay over $22 billion a year in capacity-enhancing subsidies that help offset the cost of fuel, gear, and vessel maintenance. These subsidies make it more affordable to fish, but they also lead to the overexploitation of the fish population and make it difficult for small fisheries to compete. Rather than helping, the subsidies ultimately undermine the fishing industry.

The subsidies enhance the monopolization of the commercial fishing industry by allowing only the big players to get their share of fish. Many experts believe that the subsidies deplete the fish stocks that these fisheries rely on, and science tells us that removing the fishing subsidies would increase the overall availability of fish. 

The governments’ response, in other words, has led to a decline in catch rates and depletion of fish stocks in deeper waters that were once unfishable. Overall, governments hand out more than $35 billion each year to the commercial fishing industry. That is equal to 20 percent of the value of every commercial fish caught. With fish stocks at historic lows and much of the water fished beyond the point of recovery, is more fishing the answer to our problems?

The main overfishers aren’t always in the Western world. The United States is the only Western country to appear on the “Pacific 6” list of countries responsible for 80 percent of the world’s bigeye tuna fishing, for example. The others are China, Japan, Taiwan, South Korea, and Indonesia. In fact, China is the primary offender. In 2018, China distributed $7.2 billion in subsidies – more than any country in the Pacific 6. The country has nearly 17,000 ships, many of which are illegally trawling through the Pacific.

To save the fishing industry, we must prevent overfishing. And for that, we should rely on technology, not subsidies. Companies like Fishtek Marine seek to end bycatch, which accounts for as much as 40 percent of the world’s catch. Bycatch happens when another marine animal is accidentally caught by a fishing net intended for something else. Fishtek’s technology warns sea mammals that rely on echolocation to communicate with one another. If the technology is widely adopted, the mammals will know that they need to stay away from the fished area, thus avoiding the fishing nets. That will not only save marine life, but reduce the stress and work involved in commercial fishing as well. 

If the government is going to spend money on the fishing industry, they should take these same subsidies and tie them to conservation and sustainability rather than mega fishing operations. Territorial Use Rights in Fisheries Management, for example, allows certain fishermen to fish in certain areas for an allotted amount of time. Countries such as Chile, Belize, Denmark, and the United States have already started implementing the TURF procedures. 

The state of the world’s oceans is made worse by government subsidies, which lead to monopolization and more overfishing. The subsidies should stop!

Blog Post | Food Production

Centers of Progress, Pt. 32: Budj Bim (Aquaculture)

Budj Bim represents humanity’s ancient quest to stave off hunger by deliberately managing the environment.

Today marks the thirty-second chapter in a series of articles by HumanProgress.org called Centers of Progress. Where does progress happen? The story of civilization is in many ways the story of the city. It is the city that has helped to create and define the modern world. This bi-weekly column will give a short overview of urban centers that were the sites of pivotal advances in culture, economics, politics, technology, etc.

The thirty-second Center of Progress is the historic site at Budj Bim in southeastern Australia. Budj Bim, meaning “high head,” is a dormant volcano, the dried lava of which has been crafted into a series of manmade channels, weirs, walls, and dams that may represent humanity’s oldest aquaculture system.

Aquaculture is the cultivation of aquatic organisms. Some forms of aquaculture, like fish and eel farming, involve animal husbandry, a breakthrough in food security. Animals, after all, are harder to manage than immobile plants but are also a better source of protein. Aquaculture shaped early human society in some areas of the world as much as agriculture did in others, encouraging permanent settlement and defining the rhythms of daily life. The vast aquaculture complex at Budj Bim exemplifies the innovative ways in which humans have shaped their physical environments to combat hunger throughout history.

A few other animals cultivate food from watery surroundings. The damselfish, for example, weeds its rudimentary algae gardens and aggressively defends the “crop” from other much larger creatures. However, no other living creature besides humans has come anywhere close to true aquaculture.

The ruins at Budj Bim are older than the Egyptian pyramids and the English Stonehenge. Parts of the stonework system were built before 4,500 B.C., predating early examples of hydraulic engineering in many northern hemisphere civilizations. Radiocarbon dating suggests that humans may have created many of the system’s artificial ponds as far back as 6,000 B.C. Construction of some of the extensive site’s groundwork may have even begun between 6,000 and 7,000 B.C.

Today, this large area of modified wetland, spanning around 40 square miles, is peaceful and remote: a tranquil scene of water, volcanic rock, and wildlife. Picnickers enjoy the view as black swans glide along the many spring-fed creeks, and koalas look on from above in the tall, twisted manna gum trees and angular blackwoods. Many areas that were underwater when the aquaculture system was active are now dry. But evidence of the locale’s ancient significance can be seen in the scattered stone remnants of prehistoric eel traps, manmade channels, and house sites spread across the Budj Bim area. A recent series of wildfires revealed previously unknown swathes of the complex that had been overgrown by vegetation.

The native people are known as Gunditjmara, an Aboriginal Australian clan group. In 2019, UNESCO designated the Budj Bim Cultural Landscape a World Heritage Site, noting, “Aquaculture acted as the economic and social base for Gunditjmara society for [at least] six millennia.” Of course, it is possible that other clan groups also contributed to the creation and maintenance of the stone complex at Budj Bim over the course of its lengthy history.

The site was probably born out of a series of volcanic eruptions that began around 30,000 years ago, which created the outpouring of lava that hardened into basaltic rock and later provided the raw building material for the aquaculture system. The Budj Bim volcano, also known as Mount Eccles, erupted at least ten times, with the most recent eruption occurring around 7,000 years ago, or around 5,000 B.C. Stone tools found underneath the oldest layer of volcanic ash prove that humans have inhabited the area since before the volcano erupted. The Gunditjmara’s oral histories seem to describe the volcano erupting as part of a creation myth, which some scholars take as evidence that the Gunditjmara may have “some of the oldest oral traditions in existence.” The Gunditjmara pride themselves on their tradition of storytelling. According to their mythology, the now-dormant volcano is a creator-god or ancestral-being that brought Gunditjmara society into existence. The Gunditjmara call the rock-filled lava flow area tungatt mirring or “stone country.”

It is certainly true that the hardened lava from the volcano provided an advantageous natural resource. Ultimately though, it was human ingenuity that transformed the lava landforms and waterways from a rocky swamp into a steady source of abundant food. Eel farms provided the mainstay of the Gunditjmara diet and a product to trade with other clan groups. Aquaculture, in other words, furnished the basic driver of their economy and culture. The practice was also intertwined with the Gunditjmara religion, and they considered the eel to be a sacred animal. The people also farmed galaxia fish and ate freshwater mussels and other aquatic creatures. They further supplemented their seafood diet with the meat of land animals they hunted, such as ducks, as well as plains turkeys, goannas, and kangaroos. They managed their hunting grounds with a system of low-intensity, intentional fires that burned away hazardous dry brush and helped create ideal habitats for hunting game. They also cultivated and ate various vegetables like murnong, also called yam daisy.

As with agriculture, the tasks required to maintain an aquaculture-based society are often dictated by the changing seasons. While some eels can be found in the area year-round, during certain periods of the year they number in the millions. The native eel species, Anguilla australis, can grow to over 40 inches long and weigh over seven pounds. The local galaxia fish, a slim species with a mottled pattern, usually about four inches long, are also migratory and, in the right season, could be caught in the tens of thousands. In the spring, the eels travel along rivers from the sea to their marshy inland feeding grounds. During the subsequent wet season, the marshlands burst with eels. Then, in autumn, the eels return to the sea to breed.

The local people recognized that these predictable patterns of migration provided an opportunity that they could exploit to ensure a stable supply of food. “It shows us they had a high level of technical skill, understanding of physics and of the natural environment,” according to University of Washington archeologist Ben Marwick. Drawing upon their observations of changes in water levels and eel migration routes, the Gunditjmara people manipulated the seasonal flooding with manmade channels and weirs, diverting the water flow to trap eels and fish. They also took care not to over-harvest and risk depleting the eel or fish populations.

If you could travel back in time to when the aquaculture system was in active use, you might observe workers carefully adjusting the stonework, perhaps replacing the basalt in an area where older stones had fallen away or adding in a new section. Researchers believe the ancient engineers “continually modified the system.” The stones formed a complex network of artificial channels–some over a thousand feet long–that diverted water to shepherd migrating eels and fish. Some of the aquatic creatures were driven into hand-woven nets for immediate harvest, and others were guided into holding ponds or pens to be collected later. All in all, there were at least 70 functional aquaculture systems. In those artificial ponds, the corralled eels grew fat, feeding on local insects, water snails, frogs, and small fish, until the time came for them to be eaten. Woven baskets set in weirs built from volcanic rock and wooden lattice structures would then capture the seafood.

Walking away from the elaborate trap system to visit the settled community nearby of perhaps 600 people–although that population estimate is likely to be revised upwards–built on the edge of the waterways, you would have seen numerous stone huts with fireplaces. You would have also seen women weaving baskets for the weirs used to cull mature eels, men returning from the eel traps hauling a fresh harvest in such baskets, and people preparing the eels for consumption, first by cleaning and gutting them. And you would have witnessed them smoking the rich, oily eel meat with burning leaves from blackwood trees. Researchers have found eel lipids in the earth beneath burnt, hollowed-out trees, suggesting that they were used as family cooking hearths and smokehouses to prepare the eels for trade with other tribes.

Smoking is often considered humanity’s earliest method of meat preservation, allowing meat to be stored for the off-season as well as transported and used as a trading commodity. By drying out the flesh, smoking makes it less hospitable to bacteria that need moisture to grow, and chemicals released from the smoke have antibacterial properties that further safeguard the meat. Smoking also cooks the eel meat, which is poisonous when raw. Eel blood contains a potentially deadly toxin that cramps muscles and can stop the heart from beating. Cooking breaks down the toxin. The Gunditjmara served the eels in a variety of ways. The eels’ bones and skin could be used to create flavorful cooking stock, and the meat could be complemented with local plants such as kelp and saltbush.

For millennia the aquaculture system yielded a reliable food supply, and it was still in use when the British came to the area in the 19th century and provided the first written accounts of the elaborate stone-walled facilities. In 1841, the British colonial official and preacher George Augustus Robinson arrived on an exploratory expedition and described the aquaculture system as “resembling the work of civilized man.” But he also noted, evidencing the prejudices of the era, that “on inspection I found [it] to be the work of the Aboriginal natives, and constructed for the purpose of catching eels.”

“It is hardly possible for a single fish to escape,” he continued. “[T]riple water courses led to other ramified and extensive trenches of a most torturous form.”

Today the Gunditjmara people co-manage, along with the Australian Government, the Budj Bim National Park, which encompasses the ruins of the sprawling Budj Bim aquaculture system. Some of the descendants of the ancient engineers and fishermen who masterminded the aquaculture complex still catch eels and cook them using traditional methods. Various Australian localities even hold eel festivals celebrating eel recipes, both ancient and modern.

Budj Bim in southeastern Australia

A steady supply of food is necessary for any society to function. Budj Bim demonstrates the antiquity of humanity’s quest to stave off hunger by deliberately managing the environment. For millennia the Gunditjmara transformed and enriched their local ecosystems with clearing-fires, stone infrastructure, and artificial ponds. Their elaborate system of water manipulation to systematically trap, store and harvest seafood represents one of the oldest aquaculture systems in the world. For those reasons, Budj Bim is fittingly our thirty-second Center of Progress.

Blog Post | Environment & Pollution

How Fisheries Could Be Sustainable and Profitable

Iceland and New Zealand hit on a solution to the ocean's "tragedy of the commons."

Fisheries being sustainable and profitable

The ocean covers seven tenths of the earth’s surface, and yet unlike land it largely remains a wilderness, with little of it cultivated or sensibly managed. It has enormous potential. A 2009 report for the World Bank by Professor Ragnar Arnason and other leading experts, The Sunken Billions, estimates that economic losses in marine fisheries resulting from poor management, inefficiencies, and overfishing add up to at least US$50 billion a year.

The reason is of course that the ocean is for most purposes a commons, where the absence of private property rights to its fish stocks and other resources predictably leads to wasteful exploitation.

At about the same time, in the early 1980s, two small countries, Iceland and New Zealand, both islands out in the ocean, however hit on what can be regarded as the best, or the least bad, solution to the ‘tragedy of the commons’, as overexploitation of open-access resources is often called. It is a system of individual transferable quotas, ITQs, in the fisheries. My book on Green Capitalism goes into the depth on the matter.

The idea of ITQs can be put simply. An open-access fishery would expand until no more profit was to be reaped from an additional boat. This would mean that this fishery would end up by having many more boats than would be necessary to maximize the total possible profit from it. In a sensible management scheme, the task would therefore be to reduce the number of boats in the fishery down to the point where there would be the most profit.

In Iceland and New Zealand, this was achieved (gradually and with some missteps) by restricting the rights to harvest fish to those who already had assumed the risk of investing and the toil of operating in the fisheries: the existing fishing vessel owners. Each of them received a right to harvest a certain proportion of the total allowable catch in the stock they had been harvesting, and their right, or quota, was based on catch history: If the vessel owner previously had harvested 3 per cent of the total catch, then he or she now received a right to harvest 3 per cent of the total allowable catch.

Since the quotas were individual, each vessel owner knew precisely how much he or she were allowed to harvest over the season, so he or she could concentrate on trying to minimize cost instead of overinvesting in effort to catch the fish before someone else did.

Since the quotas were transferable, in a slow and peaceful process of transactions they were transferred to those who valued them most, and who presumably were best at harvesting fish. Those who wanted to leave the fishery did so by selling their quotas, and the foreseeable end result was that effort, or the number of boats, was reduced down to the point where there would be the most profit.

Moreover, the behavior of the fishing vessel owners, the quota holders, would change. Now they would begin to regard the resource, the fish stock in which they held ‘shares’, as something to be protected, conserved. In Iceland, for example, the Association of Fishing Vessel Owners has cooperated closely with marine biologists and the authorities in setting total allowable catches in individual fish stocks prudently. By taking the resource into custody, they have become its custodians. The Icelandic fisheries are both sustainable and profitable.

An important reason why this could be accomplished was that initial allocation was on the basis of catch history (what is sometimes called ‘grandfathering’). The reduction of effort was therefore brought about by the owners of fishing vessels trading with one another, some buying out others, instead of government trying to reduce the number of boats by auctions or taxes or other measures. Those who left the fishery were bought out by other members of the fishing community, not driven out by government.

The ITQ system is not perfect. It is essentially a system of extraction rights, not full property rights. Nevertheless, it amounts to the enclosure of a commons and it is therefore a step in the right direction, towards utilizing the enormous potential of the ocean for the benefit of mankind. New technology will undoubtedly further facilitate such utilization, if not hindered by government or special interests.

This first appeared in Vocal Europe.

Blog Post | Adoption of Technology

Icelanders Turn $12 Cod into $3,500 Worth of Products

The export value of Icelandic cod has increased 100 percent in the same time that the annual catch has fallen by 45 percent.

Iceland's Profitable Cod

Something odd has happened to Iceland’s fisheries. In Icelandic waters, cod numbers have hit a historic high. But rather than taking advantage of this bountiful fishing opportunity, the annual catch has decreased by 45 percent since 1981. Over the same period, the total export value of Icelandic cod products has increased by more than 100 percent. The cause of this peculiar and seemingly contradictory trend is partly explained by Iceland’s Ocean Cluster House or what is commonly referred to as the “Silicon Valley of White Fish.”

Overlooking Reykjavik’s harbor, Ocean Cluster House is home to 120 new marine start-ups, all of which are focused on “100 percent fish utilization.” In other words, they are businesses developing ideas that use fish meat, oil, skin, bones and intestines, to draw value out of produce that would otherwise be trashed. “From one cod we can maybe get $12 for the fillet. But if we use the whole round we can get $3,500 for each cod,” explains Ocean Cluster’s founder, Thor Sigfusson. The “value-added approach challenges the notion that a fish’s primary purpose is a fillet,” he notes.

Sigfusson objects to those who believe that “fisheries around the world need more fish to catch.” Instead, he argues that fishermen must reduce waste by utilizing the 55 to 60 percent of the fish that currently remains unused. Thanks to human ingenuity “you can do more with less,” Sigfusson explains. Here are just some of the innovative ideas that are revolutionizing the Icelandic fishing industry and proving human ingenuity can add value to previously unutilized materials and processes:

  • Penzim – a gel product made with enzymes from fish intestines; softens and heals damaged skin, and eases joint pain.
  • Alda – a lemon-flavored health drink developed using marine collagen.
  • Dropi – transformed smelly cod liver medicine into a freshly squeezed luxury good Omega 3 supplement.
  • Kerecis – makes medical bandages from cod skin. Treats wounds, burns and other tissue damage – including treating diabetic foot wounds that could otherwise become infected, resulting in amputation.
  • Omega3 Pectus – Kerecis is also working on a product to be used in breast reconstruction, replacing the nylon support string, with fish skin.
  • Reykjavik Foods – making canned fished into a luxury good by adding truffles and high-end packaging.
  • Dried fish heads, and fish carcass lamps – Ocean Cluster House sells dried fish heads for $8 in their souvenir shop, serving the niche tourist market.
  • Fish jerky – the onsite store now sells this unique type of jerky.
  • Feel Iceland – a company focusing on anti-aging cosmetic products made with marine collagen and enzymes.
  • The Cherry Tree – an art and design store selling clothing and accessories made from fish skin, including bags, belts and bowties.

Ocean Cluster House has begun to spread these efficiency-enhancing practices globally and has its eyes on North American markets, where it is currently estimated that between 40 percent and 47 percent of edible seafood is wasted. Iceland now utilizes 80 percent of each cod that is caught.

Change seen in the Icelandic fishing industry is just one example of the pioneering ways that human ingenuity can create more jobs and add greater value while using fewer or previously unutilized resources. As humanity becomes more educated, interconnected and innovative, other sectors are likely to undergo similar changes, making all of our lives more prosperous.