How do government subsidies affect the economic viability of industrial shrimp fisheries on the Amazon Continental Shelf?

The southern brown shrimp (Penaeus subtilis) is the primary crustacean species commercially exploited by the industrial trawl shrimp fleet operating over the Amazon continental shelf. However, there is no information on the economic viability of this activity. Economic studies on fisheries can provide guidance in the design and implementation of management measures. This study estimated the cost and profitability of industrial trawl fishing for southern brown shrimp, analysing two scenarios: with and without diesel fuel subsidies, to verify how this subsidy policy affects the profitability of the fishery. Data from 23% of the licensed boats were obtained from three companies and nine professionals in the productive sector, in order to gather information on the characteristics of this fishery and production costs. Industrial fishing requires a high level of investment, and fuel costs are the most significant variable expenses. The southern brown shrimp is fished using trawling, a non-selective fishing gear that also catches high amounts of bycatch, including fauna that can be commercially valuable (i.e., byproducts). These byproducts added to the discount from the subsidy favour the profitability of the fishery, making it more attractive. The profitability results of the brown shrimp fishery were positive, showing the economic viability of the activity. The activity requires an average investment of USD 327.235, generating an annual revenue of USD 423.907 per vessel, with a positive net profit rate of 47% and 27% with and without the diesel fuel subsidy, respectively. The first two trips out of the four or five per year are the most profitable. However, the revenue obtained is highly unstable due to changes in the catchability of the target species throughout the year, which depends on the fishing ground and climatic variations over time. Without the diesel subsidy, the fishery would still show positive economic results in all trips. A review of this policy is strongly recommended, as it may mask the sustainability of the fishery in the future.