Impact of fuel subsidies on bottom trawl fishery operation in China

Abstract

Fishery fuel subsidies reduce the cost of fishery production, promote the continuous expansion of the fishing vessel scale and fishing intensity, lead to overfishing, and eventually result in the deterioration of fishery resources. Based on survey data from Rongcheng, Xiangshan and Beihai, China, in 2018 and 2019, this paper analyzes the cost-benefit, break-even and sensitivity of bottom trawlers to explore the impact of fuel subsidies on bottom trawl fishery operations in China. The results show that the fuel expenditure is the biggest production cost of bottom trawl fishery. The fishery fuel subsidies are crucial to most bottom trawling economies. With fuel subsidies, the break-even operation ratios of bottom trawlers in all three fishing areas are below 100%, and trawler operations are profitable. Without fuel subsidies, only Xiangshan’s trawler operation is in a safe range and can continue to operate. The results of the sensitivity analysis show that the catch price and the fuel cost are the top two sensitivity indexes and the two most important determinants of net profit in the bottom trawl fishery operation. Without fuel subsidies a large number of bottom trawlers will withdraw from fishing and decrease fishing effort, thereby reduce the current threat to fish stocks.