President announces resumption of fishing subsidies

President Dr Mohamed Waheed Hassan has said he intends to begin resuming the payment of subsidies to fishermen within days. The President added that he would try to provide fish at better prices by increasing the promotion of pole and line fishing in other countries.

President’s Office spokesman Abbas Adil Riza has said that the money was badly needed as the industry was in “real economic trouble,” despite the government coming under pressure to cut state expenditure.

Speaking to Minivan News today, Minister for Fisheries and Agriculture Ahmed Shafeeu said that the subsidy had not been paid at all in 2011. He added that this year’s subsidies this year had not been reserved exclusively for fuel,  with funding being set aside for measures to encourage investment in ice plants – for which there was apparently a high demand.

Shafeeu also spoke of the ministry’s plans, unrelated to these particular subsidies, to improve access to loans to encourage investment in the industry.

“In terms of the economics of the sector, since 2006 we have seen a decline in fish numbers. In terms of total exports, it has gone down. There are many factors – a lot of them to do with management of the budget. Also there are risks due to the world economic crisis,” said Shafeeu.

The local industry is also thought to have been affected by the mass harvesting of fish stocks by foreign vessels in and around Maldivian waters. Traditional pole and line techniques struggle to compete with the more sophisticated technology and less environmentally considerate practices used by some competitors.

Deputy Minister for Fisheries and Agriculture Ali Solih explained that the proposed subsidies amounted to Rf100 million for the year, and would be disbursed once approval came from the Majlis. He added that the current members of the ministry had been working towards this goal since assuming their posts.

Methods

The use of the traditional pole and line method being encouraged in the president’s speech have been used in the Maldives for millennia and are an important feature of the industry which has long prided itself on its sustainable practices.

The previous government, however, felt it necessary to look into greater opportunities for the use of long line fishing techniques. It argued that, despite the greater risks of harming protected species, the technique offered far greater economic opportunities for a struggling industry.

A research officer at the Ministry of Fisheries and Agriculture at the time argued that long line fishing vessels did not have to travel as far as pole and line ships, lowering fuel costs and so making operations more viable economically.

Former President Mohamed Nasheed, speaking at the opening of the Majlis 2010 session that it was not feasible to burn fuel and engage in pole and line fishing in big vessels.  He claimed at the time that experts had advised him it would be more profitable to use those vessels for group long-line fishing.

Fisheries Minister Shafeeu said that the ministry would seek to continue this policy of providing varied opportunities to local fishermen. He said that pole and line fishing remained the most “prominent” method used in the Maldives, but said that “diversification is something [that is] required”.

A feature of this approach has been seen in the granting of long-line licenses within the 200-mile Exclusive Economic Zone (EEZ) exclusively to Maldivian businesses. In April 2010, foreign licences for long lining were terminated by the government.

The long-line fishing method appears as something of a double edged sword for the industry.  While the method offers the potential for better harvests of species that subsist in deeper waters such as Yellowfin and Bigeye tuna, it is also alleged to potentially  harm the marketability of Maldivian marine produce.

Shafeeu noted that the number of skipjack tuna exports, most commonly caught using the pole and line method had dropped “significantly” although the industry had been able to sustain the numbers of Yellowfin being caught.

Many chains such as Marks and Spencer in the UK place great value on purchasing tuna caught using the traditional economically friendly pole and line method. The marine conservation group Bite Back, in 2010, expressed its belief that the use of long line methods in the Maldives could result in a UK boycott of its tuna products.

Depleted financial stocks

The Dhivehi Quamee Party (DQP) last year took the Finance Ministry and the Fisheries Ministry to court over the failure to pay fuel subsidies to fishermen.

In a similar case yesterday, the Civil Service Commission (CSC) announced its decision to repay money withheld from government employees during the previous government’s attempts at enforcing austerity measures in 2010.

Abbas remarked that due to a Civil Court ruling on this issue, the Rf443.7 million owed to civil servants was now a “legally compulsory payment.”

This financial commitment comes at a time when the government faces a widening budget deficit, argued by Finance Minister Abdullah Jihad to stand at Rf2 billion, based on current rates of spending.

As part of its new austerity measures, the People’s Majlis has been re-examining the Aasandha health care scheme in an attempt to rein in state overspending. Thorig Ali Luthfee of the National Social Protection Agency (NSPA) recently told the Majlis’ Financial Committee that the scheme was likely to spend more than double its allocated budget this year, according to Sun Online.

Were the government able to tame this overspend, it could expect to save around Rf500million. Minivan News was unable to contact Finance Minister Jihad or Ahmed Nazim, head of the Majlis’ Financial Committee,  regarding further attempts to cut spending at the time of going to press.

The International Monetary Fund (IMF) told the people’s Majlis earlier this month that a failure to reduce spending could have disastrous consequences for the Maldivian economy if it results in the depletion of its foreign currency reserves.

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