Everything comes at a price: The impact of eliminating harmful subsidies in the Spanish marine resources industry

One of the objectives for the European Horizon 2021-2027 is completely eliminating harmful fishery subsidies. Spain was the country that received the greatest amount of the previous European Marine Fishery Funds framed within EU horizon-2020. We explore the potential impacts of eliminating these harmful subsidies in the sectors related to marine resources in Spain. We address it with the novelty of applying an input-output model, disaggregating marine resource activities into three sectors (fishing, aquaculture and seafood processing sector). Our results show that the subtraction of these harmful subsidies will entail significant reductions in the valueadded of the analysed sectors, which will impact their supply and demand of inputs affecting the rest of the sectors of the economy. It will affect the final demand for their outputs and the sectors linked to them. We derive policy recommendations to smooth the transition to a fishery-related industry without harmful subsidies.

Automated summary

One of the objectives for the European Horizon 2021-2027 is to eliminate harmful fishery subsidies completely. Spain, as the top recipient of the previous European Marine Fishery Funds, is examined for the potential impacts of removing these subsidies in marine resource sectors. By utilizing an input-output model and disaggregating marine resource activities into fishing, aquaculture, and seafood processing sectors, it is found that the removal of harmful subsidies will result in significant reductions in value-added for the analyzed sectors, affecting their input supply and demand and subsequently impacting the overall economy. Policy recommendations are proposed to facilitate a smooth transition to a fishery-related industry without harmful subsidies.