Subsidies in the jumbo squid fishery in the Gulf of California,Mexico

This paper investigates the effects of fuel subsidies and value added tax refunds on the operation of two types of firms associated with the jumbo squid (Dosidicus gigas) fishery in Mexico: (a) firms with ships that catch shrimp and squid in different periods of the year and (b) firms that deploy outboard-motor boats to catch squid year-round. The cost-benefit ratios of the policies are analyzed for 2008–2015, both with and without subsidy-related income. Additionally, the net cash surplus is calculated. The elimination of subsidies may affect jobs related to vessel operations in the squid fishery and may also encourage the voluntary retirement of shrimp ships. This effect is less evident in the case of the smaller boats. Strategies aimed at improving the landed squid prices are nonetheless suggested.

► Fishing subsidies are granted to increase firm profit margins.
► Subsidies effects vary according to the availability species.
► Subsidies for fishing firm type may be appropriate.
► Elimination of subsidies could increase retirement ofships.