India’s stance at WTO balances fisheries subsidies for artisanal fishers and sectoral growth

India is likely to advocate for securing the interests of its artisanal fishers while facilitating the growth of the fishing sector at the World Trade Organisation’s (WTO) 13th Ministerial Conference (MC13) in Abu Dhabi later this month.

At the MC13, scheduled from February 26 to February 29, world leaders will negotiate on regulating fisheries subsidies that contribute to excessive fishing effort and capacity. Such subsidies include support for vessel construction, acquisition and modernisation, purchasing machines and fishing equipment and purchasing fuel, etc. They also include insurance, income support, price support for fish caught, support to cover operating losses and support targeting fishing beyond the subsidising member’s Exclusive Economic Zone (EEZ).

In December 2023, the WTO chair released an explanatory note on the draft text to curb subsidies contributing to overcapacity and overfishing, in which it proposed that member countries would have to demonstrate sustainability considerations for the fish stock on which subsidies were offered. The note specifies that the 20 largest providers of subsidies would be subject to the strictest scrutiny, while least-developed country (LDC) members and developing country members with a global share of marine catch not greater than 0.8% (de minimis) would be excluded from the core prohibition on subsidies. Countries not falling into either of the other groups would have to demonstrate fulfilling the sustainability-based conditions outlined in the draft text, in their regular notifications of fisheries subsidies.

Experts that Mongabay India spoke to say that the existing terms and conditions and proposal outlined in the explanatory note seem to restrict unwarranted subsidies, but favours countries with large industrial fishing fleets.

Most developed countries with large industrial fishing fleets are likely to have a regulatory regime that can meet the WTO’s requirement of sustainable fishing and can continue to provide the prohibited subsidies, says Abhijit Das, the former head of the Centre for WTO Studies, told Mongabay India. On the other hand, developing countries will face difficulties in demonstrating that they are engaged in sustainable fishing. This not on the grounds that developing countries are fishing unsustainably, but mainly due the difficulties in complying with onerous documentation and other requirements to establish sustainable fishing. The net result will be that developing countries like India, which do not have a large industrial fishing fleet, will never be able to create a large industrial fishing fleet in the absence of any government support, he says adding that developed countries having existing large industrial fishing fleets have created this by building on government subsidies in the past.

Talking to Mongabay India, Das says, “India has been articulating that since this (the fisheries subsidies agreement) is an environmental agreement, the principle of common but differentiated (CBDR) and respective capabilities (RC) must be followed. India has also been strongly arguing that there must be strong disciplines on industrial fishing fleets – these have historically been the cause of overfishing.”

Fishers in Kochi in Kerala. Developing countries, in the absence of regulatory regimes, will face difficulties in meeting the requirements of sustainable fishing. Photo by Claude Renault/Wikimedia Commons.The way the negotiations are proceeding so far, he says, India’s stance has got support from a handful of countries. He adds that developing countries are divided into two groups, members with a global share of marine catch not greater than 0.8% and others. As the prohibition on fisheries subsidies are not likely to apply to the former category of countries, this group has not been vocal in seeking disciplines on countries with large industrial fishing fleets.

Former negotiator for the Government of India on fisheries subsidies, Mukesh Bhatnagar, states that India’s stance is that the current proposal of the ongoing WTO agreement towards sustainable fishing, including the explanatory note, is still quite weak. There should be a stronger commitment towards sustainable fisheries from those who have offered huge subsidies in the past, especially from those countries that fish in distant waters, says Bhatnagar.

Furthermore, India is pushing for a 25-year transition period for developing countries that are neither covered by the de minimis (a global share of marine catch not greater than 0.8%), nor considered least developed countries (LDCs). India argues that these developing countries should have a sufficient transition period to address their development needs, maintain policy space, ensure their fisherworkers’ livelihoods and address food security concerns.

“Approximately four million fishermen are directly engaged in fisheries, and if you consider indirect employment, the number rises to around nine million. Their livelihoods are crucial for the country, and they should not be deprived of the small subsidies they receive. It would be preferable to extend the water exception to the Exclusive Economic Zone (EEZ) instead of restricting it to only 12 nautical miles. I believe India is also advocating for this extension,” Bhatnagar told Mongabay India.

Evolving negotiation

In the late 1980s, it became evident that the traditional approach of rapid and uncontrolled exploitation was unsustainable for fisheries resources as players active in the fishing sector had started to take advantage by investing in modern fishing fleets. By the early 1990s, various organisations highlighted the pressing need to regulate marine fisheries.

In 2001, at the Doha Ministerial Conference, WTO members decided to tackle the issue of fisheries subsidies. The mandate was later detailed in 2005 at the Hong Kong Ministerial Conference, emphasising the need to control subsidies causing overcapacity and overfishing. They also recognised the importance of “appropriate and effective of special and differential treatment (S&DT) for developing and least developed Members” considering the sector’s impact on development, poverty reduction, livelihood and food security. The negotiations gained momentum with the adoption of the United Nations’ Sustainable Development Goals (SDGs) in 2015. Goal 14.6 targets the cessation of harmful fisheries subsidies by 2020, addressing overcapacity, overfishing, and combatting illegal fishing subsidies.

Abhijit Das explains that as the negotiations evolved, they were conducted under three pillars. “The first pillar is subsidies for illegal, unregulated, and unreported (IUU) fishing. The second pillar is subsidies to overfished stocks. Agreements for both these pillars were concluded at the 12th Ministerial Conference of the WTO held in June 2022. However, regarding the third pillar, subsidies that contribute to overfishing and overcapacity, negotiations could not be concluded from June 2022 onwards. So, these negotiations are ongoing,” he explained.

The interim agreement on IUU fishing and subsidies to overseas fish stocks concluded in 2022 and must be referred back for implementation after two-thirds of the WTO membership ratifies it. “At this juncture, we are not very close to achieving that number,” he adds.

As many as 55 countries have ratified the 2022 fisheries subsidy agreement and an additional 55 are required by late February for the agreement to take effect. India is one among those that have yet to ratify the 2022 agreement.

Debate over fisheries subsidy

A conservative estimate by the International Institute for Sustainable Development (IISD) suggests that India provided Rs. 15.5 billion in subsidies to the fisheries sector in 2016, which increased to Rs. 22.25 billion in 2019, reflecting a 43% increase.

The IISD report examined three support categories for which these subsidies were provided: support for variable-cost fishing inputs, fixed-cost inputs and income support. It concluded that the first two types of subsidies are generally deemed risky from socio-economic and environmental perspectives, as they often encourage increased fishing.

The report emphasised that fuel subsidies for marine fisheries, the promotion of deep-sea fishing, measures to encourage mariculture and vessel modernisation are risky because they tend to encourage more fishing.

Regarding fuel subsidies, the report said, “state-level data suggests they predominantly benefit better-off (financially) fishers” as they can afford to purchase more subsidised fuel, which in the fisheries sector favours larger-scale fishing activities.

Senior journalist Shailendra Yashwant, who has followed the subject, agrees. The financially better-off fishers enjoying subsidies is a problem, especially when India keeps underlining the need to support low-income, resource-poor fishers, or livelihood fishing. There are studies that highlight that the subsidy given by the government is not reaching those in need, he says.

But Mukesh Bhatnagar counters the argument by saying that fuel subsidies constitute one element of India’s fishery subsidies, which state governments provide. These subsidies target smaller vessels or mechanised and modern fleets. While some mechanised vessels also receive fuel subsidies, the scale remains limited. Indian vessels are smaller and not part of industrialised fishing fleets, primarily employing fishermen. The livelihood of these fishermen depends on these subsidies; without a fuel rebate, their economic viability is compromised. Unlike their counterparts in the European Union, the USA, and other developed countries, Indian fleets operate within the India Exclusive Economic Zone (EEZ) and do not venture into other countries’ EEZs, as seen with vessels from the EU and other nations.

He adds that these facts underscore the necessity of maintaining India’s subsidies and preserving the policy space for further development in the fishing industry or fishing boats.

Olencio Simoes, the General Secretary of the National Fishworkers Forum (NFF), acknowledges issues with the current subsidy distribution system but emphasises that withdrawing subsidies could harm the fishing community. “Stop providing subsidies for industrial fishing, prohibit destructive gear, halt the concretisation of the coast, and cease the expansion of ports, which is detrimental to the environment. It has been established that the coastline is eroding due to port activities and dredging. Therefore, several other factors must be considered when addressing the depletion of marine resources,” he stated while talking to Mongabay India. Simoes explains that fishers are compelled to venture deep into the sea because of the scarcity of fish near the coast.

NFF was one among several organisations that wrote a letter to the Minister of Commerce and Industry, Piyush Goyal, in July 2023 and raised concern over WTO negotiations. “India’s fishing communities are grappling with multiple crises – extreme climate events that have devastated their habitats and livelihoods, the adverse economic impacts from the COVID-19 pandemic, large infrastructure projects, and recent policy developments at the domestic and international level such as the push for the blue economy framework,” they wrote.

About the 2022 fisheries subsidy agreement, the organisation wrote, “The WTO Agreement on Fisheries is grossly unjust and inimical to the interests of the fishers in the developing and less developed countries, especially for small scale fishers” and urged India and other developing countries to unite to ensure that the agreement does not come into effect.

Simoes said they would urge the government to raise these issues at the upcoming WTO forum.

Banner image: At the WTO meeting scheduled from February 26 to February 29, world leaders will negotiate on regulating fisheries subsidies that contribute to excessive fishing effort and capacity. Photo by Jason M. C., Han/Wikimedia Commons.