Follow us:

EU Subsidies

Published: 16/03/2011

In Europe, support for the fishing sector was introduced in order to help fishermen return to work after World War II.

As the European Union was created and the Common Fisheries Policy (CFP) took form, structural support to the Member States, which was mainly used for modernisation, became one of the most important parts of the CFP. The aim of this support was to make the EU fishing fleet more competitive.

Since then this support has been broadened and now covers a great deal of the fishing industry, including aquaculture. Restructuring of the Community fishing fleet began back in 1992, since modernisation and expansion of the fleet had led to a sharp decline in many of Europe’s fish stocks. One of the aims of this restructuring was to curb fishing overcapacity. The EU therefore started to give financial compensation for the decommissioning of fishing companies and for the scrapping or conversion of vessels to be used for purposes other than fishing. New types of structural support were introduced, such as support for the development of more selective gear or more environmentally sound fishing methods. Support for the improvement of sanitary conditions and the handling of seafood onboard the fishing vessels was also introduced. However, the EU continued to support the modernisation and building of new vessels in order to make the fishing fleet more competitive.

Within the EU today, there are essentially two types of support: structural support and national aid. Structural support is essentially money distributed by the EU in order to facilitate the production of commodities and the organisation of production. Structural support exists among other sectors as well, such as agriculture, and this support is designed to give long-term results. Since January 1994, structural support for fisheries and aquaculture has been provided within the framework of Community structural funds.

The EU has four structural funds that channel economic support to the fishing sector. The European Fisheries Fund (EFF) is the most important structural fund, and was introduced in 2007 and will be operational until 2013 and distributes a total of EUR 3.8 billion over the programming. Additional money is available under Community financial measures for the implementation of the common fisheries policy, and in the area of the Law of the Sea, also known as the 2nd instrument, the European Regional Development Fund (ERUF) and the European Social Fund (ESF). Moreover, the EU finances a number of fisheries agreements with countries outside of the EU, the majority being in Africa.

National or state aid is “aid to facilitate the development of certain economic activities or certain economic areas, where such aid does not adversely affect trading conditions to an extent contrary to the common interest”, according to artcile 87 of the EC treaty. Examples of such aid are financial transfers, loans at reduced interest rates, interest subsidies and financial incentives to companies. The rules for such aid are controlled under the Commission Regulation for de minimis 875/2007, as well as the Commission guidelines for the examination of State aid to fisheries and aquaculture (2008/C 84/06).

Reprioritising EU support

The reform of the CFP in 2002 meant great improvements in structural support. The decision was taken to end common support for modernisation of vessels, beginning in 2004. At the same time support for modernising fishing vessels was only distributed on the condition that they would not increase fishing capacity. The reform also included an end to subsidies for exporting overcapacity, through so-called joint ventures, as well as increased subsidies for the scrapping of vessels. However, the creation of new fishing opportunities for the EU fishing fleet is still one of the highest priorities within the CFP. Negotiation over third-country agreements therefore continues, and this is generally paid for by the EU.

When the EFF replaced the FIFG in 2007 a number of new, broad support initiatives for sustainable development in coastal communities were introduced. They include some opportunities for alternative employment, as well as support for increased protection of fish stocks and the marine environment. However, the programme still contains some doubtful provisions such as the opportunities for vessel modernisation and support for engine replacement.

With the current reform of the CFP, subsidies and provisions under the continuation of the EFF after 2013 is being discussed.

Generally, the FISH believes that subsidies to the fisheries sector should gradually be terminated, and that support aid that contributes to maintaining or increasing overcapacity, in particular all aid for the modernisation of vessels should be stopped immediately. Aid for the access to fish resources outside of the EU should also be stopped. Not all subsidies are harmful, however. Some of the EU-structural funds, such as the EFF, have the opportunity to be used for nature conservation measures such as developing Marine Protected Areas (MPA:s) or new environmentally friendly technology. There is also the possibility to use these funds for financing of work within the Natura 2000-network. Future fisheries subsidies should only be targeted at things that supports the recovery of fish stocks, facilitates the transition towards sustainable fisheries and provides value to society, such as research, improved control and enforcement and the cooperation between fisheries and scientists as as greater stakeholder involvement.

Attached documents: