Subsidies, Temporary Laying-Up, and Efficiency in a Coastal Commercial Fishery

Abstract

Subsidies for temporary laying-up (TLU) are often introduced to support commercial fishers in crises. We studied the effect of a German TLU in response to quota cuts and the COVID-19 pandemic on fishers’ revenue frontiers and efficiency by stochastic frontier analysis, and on species composition by fixed-effects models using monthly landings declarations from 2008 to 2020. Own laying-up days increased inefficiency and decreased revenue frontiers. Subsidies were related to outward shifts in the revenue frontier, and were linked to small increases in landings of unregulated marine species. Laying-up periods by other fishers were not related to changes in the revenue frontier or efficiency, but to changes in species composition of unregulated species, away from freshwater species and flatfish, and towards eel and other marine species. Technical efficiency mostly decreased over time, offsetting temporal outward shifts in the revenue frontier.