Fishing subsidies and Mexico’s marine protected areas

Fisheries subsidies in Mexico can increase profit marhins of fishing activities but also create market distortions.

Policy in practice

› Regions: Americas

› Countries: Mexico

› Tags: Subsidies, Marine protected area

Mexico’s fisheries are important to the national economy. They are a vital source of nutrition for Mexicans, provide essential income for coastal communities, and are an important source of foreign currency. Such values are reflected in the Mexican government’s long-term vision to encourage the national development, competitiveness and strategic planning for fisheries. This vision is articulated through the National Development Plan; the Sectorial Program of Farming and Fishing of the Secretariat of Agriculture, Livestock, Rural Development, Fisheries and Food, a unit of the federal executive branch of the government of Mexico; and the National Sector Program of Fisheries and Aquaculture. There is a particular focus on improving the competitiveness of the fisheries sector.

Fuel subsidies for fisheries in Mexico have the purpose of increasing the profit margin of fishing activities (and therefore reducing the marginal cost of fishing compared to other economic activities) to increase the welfare of fishing communities. However, such subsidies have created multiple market distortions and externalities; in essence they encourage more fishing and discourage investment in fishery resources, such as more efficient and environmentally friendly technologies. This has contributed to over-exploitation of fish stocks, stagnated production and external costs to others, such as bycatch of non-targeted species, marine pollution, CO2 emissions and a reduced effectiveness of marine protected areas.

Source report

OECD (2017), Marine Protected Areas: Economics, Management and Effective Policy Mixes, Box 5.1 p. 153

Key policy message

Removing or reforming harmful subsidies can have budgetary and economic efficiency benefits, while also reducing wasteful and environmentally destructive incentives resulting in marine biodiversity loss.