The economics of overfishing | Lombard Odier: can we sustainably feed the world’s appetite for fish?Overfishing is not just an environmental c...
Published on by Water Network Research, Official research team of The Water Network
: can we sustainably feed the world’s appetite for fish?
Overfishing is not just an environmental crisis, it is also an economic one. The fishing industry generates billions of dollars in global trade, but its practices are depleting the world’s fish stocks at unsustainable rates. According to the UN’s Food and Agriculture Organisation (FAO), over a third of the world’s fishery stocks are now classified as overfished, meaning that they are being harvested faster than they can naturally replenish.
This poses significant risks not only to marine ecosystems but also to economies and food security worldwide. Here, we explore the economic incentives that are driving overfishing and the potential solutions that could help reverse the trend.
Global trade and the overfishing dilemma
In 2018, the international trade in fish and aquaculture products was valued at USD 150 billion, while the value of just the first sale of fish sold both domestically and internationally was an astonishing USD 401 billion, according to the FAO. Fish is a crucial source of protein for over 3 billion people globally, especially in coastal and developing regions. As demand for seafood grows, so does the pressure on fish stocks, creating a tension between short-term economic gains and long-term sustainability.
Overfishing is driven by a combination of factors, including technological advances in fishing, globalised trade, and government subsidies that encourage increased fishing activity. According to a study in the International Journal of Ocean Affairs, governments provided around USD 35 billion in subsidies to the fishing industry in 2018, supporting costs such as fuel, new vessels, and fishing gear.
Many of these subsidies exacerbate the problem by encouraging overcapacity in the fishing industry, allowing more boats to fish larger areas, often leading to the overexploitation of fish stocks. As fish populations dwindle, the economic consequences can be severe: reduced catches, lower incomes for fishermen, and increased food prices for consumers.
Reforming fishing subsidies: a step towards sustainability
One of the most urgently needed solutions is the reform of harmful fishing subsidies. In June 2022, a landmark agreement was reached with the World Trade Organisation (WTO), aimed at curbing subsidies that fuel illegal, unregulated, and unreported fishing activities. The WTO’s Agreement on Fisheries Subsidies, once ratified by two-thirds of its members, will prohibit subsidies for fishing overfished stocks and provide measures to prevent illegal activities.
However, as of July 2023, only 78 out of the required 110 countries have ratified the agreement, which means the full implementation is still pending. This delay highlights the complex political challenges of reforming an industry that is deeply embedded in many national economies.
For numerous countries, particularly developing ones, fisheries are an economic lifeline. Balancing economic interests with environmental stewardship requires international cooperation and robust enforcement mechanisms. If successful, this reform could reduce the global fishing fleet’s environmental impact and encourage more sustainable practices across the industry.
Aquaculture: a double-edged sword
As wild fish stocks have declined, aquaculture – the farming of fish in controlled environments – has rapidly grown to meet global demand. Today, more than 50% of the fish we consume comes from aquaculture, according to the FAO. On the surface, this appears to be a solution to the overfishing crisis – by farming fish in ponds or pens, we can reduce the pressure on wild populations while still meeting consumer demand.
However, aquaculture has its own economic and environmental challenges. Many fish farms rely on fishmeal – a protein-rich feed made from small, wild-caught fish, according to the World Wildlife Fund (WWF). This practice can have devastating impacts on poorer countries that depend on these small fish for their own food security. By diverting these resources to industrial fish farms, local communities may face increased food prices or shortages.
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