The subsidy program for diesel oil prices for fishing vessels and its impacts on the labor market and fish production in Brazil

Abstract

The fishing industry worldwide has historically been leveraged by government subsidies. In Brazil, one of the main subsidies for this sector is the Subsidy Program for the Price of Diesel Oil for Fishing Vessels (PSPO). According to the ordinances published in the Federal Official Journal (DOU), the transfers allocated to this policy from 1997 to 2019 exceeded USD 483 million in subsidized oil. However, the economic, social, and environmental impacts of this type of subsidy are controversial. Regarding the effects on the labor market, there is limited evidence, particularly within the national literature, and the results do not indicate any influence of the program on the number of establishments or formal jobs in the fishing sector. Moreover, there is no indication of an impact on the increase in extractive fish production. These findings support the notion that these financial resources might be used to cover inherent costs of fishing activities, ensuring artificial profitability within a relatively stable production. This occurs in a renewable natural resource that displays signs of depletion.