The rise and decline of fishing industry support – with a translation from Norwegian of Bjørn S. Brochmann's 1981 article ‘long-term effects of government support to the fisheries’

Abstract

Input and output measures, including the use of (Pigou) taxes, have been recommended to bridge the gap between average and marginal revenues in fisheries. Several countries have improved management, but few have followed the fiscal recommendations. On the contrary, subsidies that can expand capacity and effort have been and still are used. For decades, international organizations such as the WTO, FAO, and OECD have discussed subsidy issues. In the case of Norway, annual support negotiations between government and industry were institutionalised in 1964. The support increased throughout the 1970s, and at its peak in 1980 support amounted to about 40% of the gross value of all catches. Bjørn S. Brochmann was a chief economist in the Ministry of Fisheries. During a leave of absence in 1979–80 he wrote a report, and in 1981 he published a journal article discussing long-term effects of government support to fisheries. Based on the Gordon-Schaefer model, he demonstrated that revenue-augmenting and cost-reducing support could not solve the poor income problem of fisheries. Rather, subsidies will work in the opposite direction, creating even greater need for future support. His reports, conference talks, and media interviews created havoc in fishing communities and organizations. This paper places Brochmann's work in a national and international context and discusses its influence on Norwegian fisheries policy. A translated version of Brochmann's article (1981) is included in this paper, as a reference guide for subsidy-reliant countries and as a tribute to the history of the political economy of fisheries.