Conceived and designed the experiments: JJH SM URS. Performed the experiments: JJH SM. Analyzed the data: JJH SM URS AD AL. Contributed reagents/materials/analysis tools: AD AL. Wrote the paper: JJH SM URS AD AL.
The authors have declared that no competing interests exist.
This study examines the impact of subsidies on the profitability and ecological stability of the North Sea fisheries over the past 20 years. It shows the negative impact that subsidies can have on both the biomass of important fish species and the possible profit from fisheries. The study includes subsidies in an ecosystem model of the North Sea and examines the possible effects of eliminating fishery subsidies.
Hindcast analysis between 1991 and 2003 indicates that subsidies reduced the profitability of the fishery even though gross revenue might have been high for specific fisheries sectors. Simulations seeking to maximise the total revenue between 2004 and 2010 suggest that this can be achieved by increasing the effort of Nephrops trawlers, beam trawlers, and the pelagic trawl-and-seine fleet, while reducing the effort of demersal trawlers. Simulations show that ecological stability can be realised by reducing the effort of the beam trawlers, Nephrops trawlers, pelagic- and demersal trawl-and-seine fleets. This analysis also shows that when subsidies are included, effort will always be higher for all fleets, because it effectively reduces the cost of fishing.
The study found that while removing subsidies might reduce the total catch and revenue, it increases the overall profitability of the fishery and the total biomass of commercially important species. For example, cod, haddock, herring and plaice biomass increased over the simulation when optimising for profit, and when optimising for ecological stability, the biomass for cod, plaice and sole also increased. When subsidies are eliminated, the study shows that rather than forcing those involved in the fishery into the red, fisheries become more profitable, despite a decrease in total revenue due to a loss of subsidies from the government.
Fisheries subsidies can be categorised as beneficial, capacity-enhancing or
ambiguous. Beneficial subsidies are programs that lead to investment in natural
capital such as fish stocks. Capacity-enhancing subsidies lead to disinvestments in
natural capital assets that lead to overexploitation and remove the ability of the
fishery to be sustainable in the long term. Ambiguous subsidies are those whose
impact are undetermined and could lead to either investment or disinvestment in the
fishery resource
Harmful fisheries subsidies negatively affect the long-term sustainability of the
ecosystem (because they lead to overcapacity), which is already under threat from
climate change
The major fishing nations in the North Sea are Denmark, the UK, the Netherlands and
Norway, with Germany, Belgium and France also active in the fishery. The principal
fishing fleets (
Change in effort of the Nephrops trawlers, demersal trawl-and-seine fleets,
beam trawlers, and the pelagic trawl-and-seine fleet relative to the effort
for each of these fleets observed in 1991 (1991 baseline). Data obtained
from ICES WG assessment reports defined in
The aim of this study is to investigate the impacts of fisheries subsidies on the ecological resilience and economic profitability of the North Sea ecosystem. This will be achieved by using an ecosystem model to contrast how policies on subsidies might influence fleet structure in terms of relative effort of the principal fleets, and therefore the economic and social contribution to the wellbeing of European fisheries. The model will also be used to examine the impact of subsidies on the optimisation for maximum profit vs ecological stability.
Results from the two analyses are given below: 1) Profits obtained from the hindcast
analysis of the published, fitted, ecosystem model
The variable costs of each fleet change with changes in effort, and as such only
those fleets with changes in effort will show changes in variable cost over
time. These changes in effort cause changes in the profit made by each fleet,
with the pelagic fleet starting off with the biggest profit, and also the
largest difference between subsidised and non-subsidised profit (
Profits (pink) and gross revenue (blue) in the “with
subsidies” model, pelagic trawl and seine fleet (2E and 2F) and
the Nephrops trawlers (2G and 2H), with subsidies and profit when
subsidies were removed from the model (red). All left hand figures show
true values and right hand figures show cumulative values - all in
€ million. In all cases gross revenue is higher than profit because
costs are subsidised. Both the demersal (2C, 2D) and pelagic fleets (2E,
2F) were profitable for the whole time series, although the demersal
trawlers profitiability showed an upward trend while the pelagic fleet
profitability declined. However, the initial difference in profits for
demersal and Nephrops fleets seem large but that is due to the scale of
their profits compared to that of the pelagic fleet. The differences
between gross revenue (square) and profit in the model without subsidies
(red) diminish over the 12 years of the simulation due to the fact that
the effort for all these fleets decline over time (
The initial difference for demersal and beam fleets seem large but that is due to
the scale of their profits compared to that of the pelagic fleet. In addition,
the profit with subsidies (pink) does not seem much lower than that without
subsidies (red), but for example in 2003 the profit without subsidies of beam
trawlers (
From
The beam trawlers start off at a loss in 1991 and cumulatively make a loss for
the whole simulation (red), except for the last year, although their gross
revenue was above zero from 1995 onwards (blue). Similarly, the cumulative
profits of Nephrops trawlers (
In all cases gross revenue is higher than profit because costs are subsidised. However, the profit of the demersal and pelagic trawls and seines are minimised with the reduction in effort, while that of the beam trawl increases over the time period of the simulation and the Nephrops trawl profit declines.
In this analysis the model with and without subsidies are simulated forward by
optimising for maximum profit or maximum ecological stability. Here, we define
ecological stability as the longevity-weighted summed biomass for all the
ecosystem groups, following Odum's
The profit optimisation runs showed that after 2003 the effort of the demersal
fleets declined significantly regardless of whether subsidies were applied or
not, while beam, pelagic and Nephrops fleets increased (
Effort in 2003 relative to the 1991 basline and those estimated by the
policy optimisation routine in models with and without subsidies when
optimising for A) profit and B) ecological stability.
The Nephrops fleet is the most profitable fleet in the system. Despite the
increased effort (increased 3 times,
When optimising for profit (economy, red) or ecological stability (blue)
from 2003 forward to 2010, with or without subsidies, the profits (in
€ million) were substantially different. Optimising for profit
showed that the Nephrops fleet (
Annual landings (1000 tonnes) of A. cod, B. haddock, C. whiting, D.
Nephrops, E. Norway pout, F. herring, G. plaice and H. sole estimated
when optimising for profit (Economy, red) and ecological stability
(blue), with and without subsidies. The increase in effort by the
Nephrops fleet when optimising for profit (
The biomass (1000 tonnes) of A. cod, B. haddock, C. whiting, D. Nephrops,
E. Norway pout, F. herring, G. plaice and H. sole. The biomass of hake,
haddock, whiting, Nephrops, Norway pout, herring, plaice and sole showed
very little difference when optimising with or without subsidies. The
main changes occurred when optimising for profit, where the increase in
Nephrops trawl effort (
The profit obtained when subsidies are included are dramatically less for the
demersal trawlers than when no subsidies are given (
Conversely the landings of Nephrops, herring and Norway pout stays low (
When optimising for ecological stability the profitability of some fleets are
maximised because optimising for ecological stability reduces the landings of
species caught by the demersal fleets, beam trawlers and Nephrops trawlers,
which causes and increase in their biomass. Many of these species are very
profitable, such as sole, turbot, lemon sole, monkfish, hake and halibut. These
gears discard some of these profitable species and the juveniles of some of the
main commercial species such as cod, haddock and whiting, which reduces the
ability for the juveniles to grow into adults and be caught in later years. Thus
reducing the effort will increase the biomass of these species over time (as
seen in
The fishery stability (described by the fisheries in balance index, or FiB) and
ecosystem redundancy are described in
The stability of the fishery (described by the Fisheries in Balance
index, or FiB) and the ecosystem redundancy are described in
Finally, The results show that in the short term (the 7 years of these simulations) the objective of management matters more than whether subsidies are provided or not. Thus, if the objective is to optimise ecosystem longevity as oppose to maximizing for profit, the fleet structure would be very different. However, if you are optimising for profit, then having capacity enhancing subsidies would increase fishing effort, but not ‘true’ profit.
The impact of subsidies on the ecosystem indicators such as redundancy, FiB total
biomass of important species, total catch, cumulative catch and landed values is
depicted in
The percentage difference in ecosystem redundancy, FiB, and the biomass of cod, haddock, whiting, Nephrops, Norway pout, plaice and sole at end of the simulation (2010) and the total catch, cumulative profit and landed value of all species between 1991–2010 when subsidies were excluded and optimising for profit or ecological stability. Positive values indicate that removing subsidies would increase values, such as that of cumulative profit and biomass. Negative values indicate that excluding subsidies have a negative impact, such as the reduction in landed value obtained without subsidies. The large increase in cumulative profit without subsidies when ecological stability is the objective function shows the importance of removing subsidies to the profitability of the fisheries.
It is clear that the subsidies have a larger impact on the fleet's financial performance (profit and landings) than on the ecological indicators such as redundancy. This is because it is easy to increase the biomass of some species in 7 years, and therefore the landings of these species, but not as easy to increase the longevity of all species – which would be needed to improve the ecological longevity of the ecosystem. This shows that if one wants to manage species sustainably one needs to take the long term perspective and it would take more than the 7 years of our simulation to undo 200 years of intensive fishing.
At an EU seminar on financial policy in the future Common Fisheries Policy in Brussels on the 13th of April 2010, Magnus Eckeskog of the Fisheries Secretariat of Sweden concluded that “In order to be able to assess which EU subsidies are good for the environment, we need a full assessment of all EU fisheries subsidies and their impacts on the environment.” This study is a first step towards that end in the North Sea.
Stouten et al.
The results from the optimisations show that in spite of higher landed values and
catches with subsidies (indicated by negative values for landed value and catch in
Removing subsidies does not make a significant difference on overall ecosystem
redundancy in the 7 years of the simulations, as it is very dependent on changes in
the lower trophic levels (phytoplankton and zooplankton) which are mainly influenced
by changes in the environment
However, removing subsidies does change the structure of the fleet, leading to lower effort for most fleets regardless of which function was optimised (profit or ecological stability). The removal of subsidies increased the biomass of cod, haddock, herring and plaice by 1–3% by the end of the simulation (2010) when optimising for profit and for cod, plaice and sole by between 0.3–1.2% when optimising for ecological stability. These changes are not as noticeable as the difference between optimising for ecological stability and the impact of model uncertainty on these should be investigated in more detail. However, as all scenarios were run with equally uncertain input parameters, these results do show the first indication of the negative impact that subsidies have on the biomass of important fish species, and the profit that can be made from the fisheries. Cumulatively, the profit obtainable from the fishery was lower regardless of whether you want to make more money or want to keep the ecological system stable.
Our simulations indicate that rather than forcing those involved in the fishery into the red, fisheries become more profitable when subsidies are removed, despite a decrease in total revenue due to a loss of financial transfers from the government. Amaliorating for this loss may require some re-distribution of effort among the North Sea fisheries or redistribution to the wider economy. In this situation it would be best to avoid removing subsidies completely at first but to re-direct the funds to ease the transition for those affected by reduced subsidies.
We have shown in this contribution contrasting policies that aim to maximise economic and ecological criteria. Neither are particularly attractive as a policy, the purpose here being to demonstrate in contrasting situations how subsidies influence model predictions of past and future profits. Extending these analyses, we plan to focus attention on more realistic scenarios, which might aim to seek a middle ground between ecological and economic targets. Such analyses ideally requires working with stakeholders and policy makers to define, up front, what might be acceptable scenarios worth investigating and, eventually, implementing. Future work will also include the differences in benefits of subsidies to fishermen from different countries.
An ecosystem model of the North Sea, parameterised and calibrated using time series
data of catch and biomass
Ecopath with Ecosim (
Ecosim uses the input data from Ecopath as the first timestep in a dynamic
expression of biomass through a series of coupled differential equations,
where the change in biomass over time is expressed as:
Fishing effort is used to calculate the fishing mortality part of total
mortality which is used to calculate the biomass of each group in the next
time step of the model. The fishing mortality rate
In Ecosim, a formal optimisation routine can be used to evaluate the fishing
effort over time that would maximize a particular objective function (or
performance measure) as defined by the user
The proportion of the landings and discards of each species taken by each
fleet, as reported by STECF (Scientific, Technical and Economic Committee
for Fisheries) from 2003 to 2007
Current information on the ex-vessel price (€/tonne) of each species to
each fleet and economic performance of each fleet was obtained from the data
reported in the 2008 Annual Economic Report
In assigning the prices of each species to the catch of each fleet, we found
instances where there was no specific price information for a particular
species - fleet combination. Where other price information was available for
the species, we assigned the minimum price to that combination; otherwise a
nominal value of 1 was assigned (6% of total). We also found a few
instances (2% of the total) where price was reported, but there was
no catch. These somewhat puzzling cases were confined to shellfish groups
and reflect some of the differences in the sources of information arising
from AER and STECF
Fixed- and effort-related costs reported for each fleet in the AER include
the subsidies paid to the fleets. Costs in the AER report
The new fleet structure was used to update subsidies reported for each
country in Sumaila et al.
This share of subsidies data was used to estimate the proportion of fixed and
effort related costs of each fleet that were subsidised, by combining it
with the AER cost data to calculate how the gross revenue of each fleet
differed when subsidies were included and when they were not (
Our simulation analysed profit in the North Sea fisheries with and without subsidies. When contrasting profits in the two scenarios, it is important to note that in the scenarios with subsidies, the total revenue generated by a given fishery is augmented by the subsidy, while this does not occur in the non-subsidy case. Since a subsidy represents a government transfer, economically, this is not considered profit generated in a fishery and, as such, subsidies and total costs are subtracted from total revenue to produce an estimate of ‘true’ fishery profit. This measure can then be compared to profit in the non-subsidy scenarios in our simulations.
Thus, in the “with subsidies” scenario, the profit, π, is
given by the equation:
The amount of subsidies, S, is calculated as:
In the “without subsidies model”, the profit,
The value of landings is calculated simply as catch*ex-vessel price. In this case, the units for total value are given in millions of €.
The effects of including or excluding fisheries subsidies were evaluated by performing two types of simulation, namely, Hindcast simulation and Optimisation (2.1 and 2.2).
The hindcast simulation predicts changes in the relative biomass of each
functional group in the model when driven by changes in the fishing effort
and mortality, and trends in primary productivity during the period
1991–2003. The simulation has been calibrated to time series data from
fish stock assessments and biological surveys by estimating the parameters
that influence the strength of the predator-prey interactions. Full details
are given in Mackinson et al.
During the simulation, changes in the relative effort of the various fishing
fleets were combined to determine the total mortality of the given species.
The mortality of a species caused by a particular gear is known as the
partial fishing mortality (F), and is calculated as:
Because the variable costs of fishing are linked to the amount of fishing
effort expended, it is important to have knowledge of how the effort
patterns of each fleet changes during the simulation. Trends in effort for
each fleet (
Hindcast simulations were run with the fixed and variable costs of fishing subsidised and not subsidised. In the non-subsidised version of the model, the costs of fishing where therefore increased so that the real cost of fishing would decrease the profit that is obtained from the fishery. The differences in gross revenue and profit were recorded in millions of €. In addition, subsidies were also removed from the profits calculated by the model post simulation, and these were compared with the scenarios where the subsidies were removed from the value of the fishery as an input variable in the model.
Two future policy optimisation scenarios were performed (using a
Davidson-Fletcher-Powell non-linear routine to improve an objective function
by changing relative fishing rates iteratively
The changes in fleet structure of the demersal, beam, pelagic and Nephrops trawls by running 10 optimisations starting from random fishing mortalities (to avoid optimisation being trapped in local minima) for each run to see if the effort distribution is stable;
What profit can be made from the four different fleets when optimising for a) profit or b) ecological stability;
The impact that the optimised run would have on the ecosystem, specifically:
What changes there would be on the landings and biomass of the principle species (cod, haddock, whiting, Nephrops, plaice, sole, herring, Norway pout); and
What changes there would be to fishery stability and ecosystem resilience?
The two policy optimisation scenarios were:
maximising economic return, and by contrast;
maximising the ecological stability of the ecosystem.
The economic optimisation scenario aims to maximise the total profit (net
economic value, i.e. value - fixed and effort related costs), over all
fleets even if this means operating some fleets unprofitably to act as
controls on less valued species that compete/predate on more valued ones
In addition, future scenarios were run with- and without subsidies. The fitted model was run forward for 7 years from the start of 2004 to the end of 2010 optimising for profit or ecological stability in the last 7 years using 2003 as the base year. Thus the optimisation begins at the end of the period of declines in effort.
The effort of the inshore fisheries were not optimised for, but held constant over the duration of the simulation. The rationale for this is that fisheries policies are aimed at making changes in the main commercial fleets prosecuting fisheries in the central North Sea, whereas, local and regional management decisions are the tools used to affect change in the inshore fisheries.
From the simulations estimates of fishery stability and ecosystem resilience
were obtained. The fishery stability is defined by the FiB index
The ecosystem resilience is estimated using the information theory index of
redundancy (R), first estimated by Ulanowicz
AER and Ecopath model fleet group.
(PDF)
Fixed cost and effort-related subsidies by subsidy type.
(PDF)
Revenues, costs and profits, with (a) and without (b) subsidies.
(PDF)
Sources for effort data used in the hindcast simulations.
(PDF)
Catch composition and price of the most important species.
(PDF)
The authors acknowledge Dr. Branka Valcic and Ms. Karen Alexander for their comments on the manuscript.