MASTER OF ENVIRONMENT

FACULTY OF ENVIRONMENTAL STUDIES

UNIVERSITI PUTRA MALAYSIA

EMG 5302
TRADE, FINANCE AND SUSTAINABLE DEVELOPMENT

ASSIGNMENT – THE IMPACTS OF ARTIFICIAL REEFS ON THE

SUSTAINABILITY OF MALAYSIAN FISHERIES

NAME MATRIC NO.

MOHD KHAIRUL AZWAN BIN ABDUL HAMID GS45861

MUHAMMAD SYAZWAN BIN ABD RAHMAN GS40160

RUSLEI BIN MOHD NOR GS44586

Rank of the Fisheries Policies

1
AR Programs

2
Fuel Subsidy

3
Catch Incentive

4
Boat And Engine Subsidy

5
Subsistence Allowance

Highest Score
Lowest Score

Criteria used to rank the fisheries policies.

There are three criteria used to rank the fisheries policies in Malaysia. The first criteria used
are the purposes of the incentives and programs that have been designed by the government.
Secondly, the government allocations and expenditures for the programs meanwhile the third
criteria used are the efficiency and outcomes of those incentives.
 Purposes

Criteria

Efficiency Government
and Allocations and
Outcomes Expenditures

Criteria Purposes Government Efficiency and Total /

Policy Allocations and Outcomes 3 Criteria
Expenditures
AR Programs
Fuel Subsidy
Catch Incentive
Boat and Engine
Subsidy
Subsistence
Allowance

Based on the scoring above, the AR Programs result highest score due to the best purposes of
the policy, the least government allocation and the best efficiency and outcomes from the
policy. Meanwhile, the Boat and Engine Subsidy and Subsistence Allowance result lowest
score due to the less reliable purposes of the policy, a lot of government money allocated to
the policy and lesser efficiency and outcomes from the policy.

1. AR Programs

A) Purposes

i) Conservation - To enhance coastal fisheries resources, to provide firm

substrate for marine fauna and flora to grow, to deter the encroachment of
prohibited inshore areas by trawlers;
ii) Fishing - To aggregate scatter fish; (save time and fuel for searching fishing
area; and
iii) Non Fishery Use - Provide firm substrate for marine fauna and flora to grow,
enhance marine resources (recreational: SCUBA, snorkelling).

B) Government allocations and expenditures

The government has spent more than RM100 million on AR programmes in Malaysia
over the past 30 years.

This AR programme increase current marine resource rather than training artisanal fishers to
be more efficient is the best strategy.

C) Efficiency and outcomes

i) The larger size ARs, are superior to the smaller ones in attracting more marine
flora and fauna;
ii) The large size designs are excellent in performing the dual functions of
creating new habitats and deterring the encroachment of trawlers into inshore
areas;
iii) Most ARs modules placed on coarse sand seabed were stable and no scouring
occurred. The AR design allowed the passage flow of current above the
module base, thus facilitating current flow with little resistance across the
module at the bottom; and
iv) Good designs do attract more marine flora and fauna.
 2. Fuel Subsidy

A) Purposes

i) To reduce some of the operating costs of fishing as a result of rising of fuel

prices in the market; and
ii) To encourage fishermen activity to ensure the country’s supply of fresh fish to
meet the needs of consumer while avoiding an increase in the price of fish as a
result of supply shortage.

B) Government allocations and expenditures

The subsidy programme provided direct assistance to individual small scale fisher to help
free no owner operator from their bond to boats from their bonds to boats and gear owners.
Fuel subsidy for the fishery sector represents huge proportion of the total government
subsidy.
Component of Year 2009 Year 2010 Year 2011 Year 2012
Subsidies (RM) (RM) (RM) (RM)
Diesel Subsidy 387,518,780 429,390,275 400,952,761 424,433,933
Petrol Subsidy 45,168,116 44,845,339 44,933360 49,522,623
Total of Subsidy 432,686,896 474,235,614 445,886,121 473,956,556

Source: LKIM (2013)

 C) Efficiency and Outcomes
Subsidies have long-run equilibrium effects. (Subsidies result in overproduction
deadweight loss). It will reduce the operating cost in the fishery industry.

3. Catch Incentive

A) Purposes

i) To encourage fisherman to increase and maximize their fish productivity; and

ii) To increase livelihood for local community.

B) Government allocations and expenditures

Component of Subsidies Unit Zone A Zone B Zone C Zone C2

Catch Incentive (cent/kg) 0.10 0.10 0.10 0.20
Maximum catch
(MYR/mo/pax) 15-350 750 1500 5000
incentive

Year
Component of Subsidies
2009 2010 2011 2012
Catch incentive 33,437,417 34,258,752 53,135,869 63,739,882

Source: LKIM (2013)

The incentive is an average of RM0.10 per kg of fish. Due to the quantity of catches
vary according to hardware type and category of vessel, the LKIM using the
following method as the basis of payment:

i) Outboard mechanized vessels using trawl hardware traditions of $ 150.00

per month;
ii) In mechanized fishing vessels using purse hardware tradition of RM350.00
per month;
iii) Mechanized fishing vessels operating in the area of Zone B and using
hardware trawlers and purse seiners of RM750.00 per month;
iv) Mechanized fishing vessels operating in Zone C area and using hardware
trawlers and purse seiners of RM1,500.00 per month; and
v) Mechanized fishing vessels operating in the area of C2 Zone and use
hardware trawlers and purse seiners of RM2,500.00 per month.

C) Efficiency and Outcomes

i) The government spent huge amount of money towards the policy but the
outcomes remained low for the policy; and
ii) All the payments of incentives to fishermen are no longer done to the private jetty
but will be done at all LKIM jetties due to the manipulation of middle men.
4. Boat And engine Subsidy

A) Purposes

i) Primary aim of eradicating poverty;

ii) Provide direct assistance to individual small-scale fishers to help no owner
operators from their bonds to boat and gears;
iii) To solve the problems arising from the conflict between the traditional
fisherman and the mini trawler fishermen in the inshore waters; and
iv) Increase hardships in the long run.

B) Government allocations and expenditures

i) The program comprises six loan schemes available for the following subsidies
for the boat, engines, fishing gear (nets) natural disasters (flooding), tsunamis,
and the upgrade of vessels.

Year
Component of Subsidies
2009 2010 2011 2012
11,715,61
Other Support programs 12,405,750 69,129,727, 4,199,950
4

Source: LKIM (2013)

C) Efficiency and Outcomes

i) Providing facilities for fish production;

ii) Providing and supervising credit facilities for fish production and ensuring the
maximum use of these facilities;
iii) Engaging in commercial fisheries enterprises;
iv) Stimulating the establishment and expansion of fisheries-related industries;
and
v) Saddled with socioeconomic responsibilities, such as uplifting the economic
status and social conditions of fishermen; increasing fish production;
generating employment opportunities; and reducing economic imbalance
among fishermen.

5. Subsistence Allowance

A) Purposes

i) This part of efforts to help fishermen reduce the burden of life than to
stimulate them to develop themselves in the fisheries sector; and
ii) To eradicate poverty among fishermen.
 B) Government allocations and expenditures

Component of Subsidies Unit Zone A Zone B Zone C Zone C2

Livelihood Incentive (MYR/mo) 200 200 200 200

Component of Year
Subsidies 2009 2010 2011 2012
173,761,40
Livelihood incentive 105,382,400 82,924,000 172,831,200
0

Source: LKIM (2013)

i) A payment to the fishermen at RM200.00 per month for an individual fishing

vessel owners and employees of local residents working on licensed fishing
vessels.

C) Efficiency and Outcomes

i) By the implementation of this policy, the fishermen could contribute to the

preparation of food sources, particularly in the area of marine catch; and
ii) However, this incentive cannot change the fate of fishermen as a whole but
somehow the fishermen should not expect full assistance from the
government.