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The Effect of the Copra Subsidy on Fishing, Welfare, and Coral Reef Ecosystems in KiribatiSheila WalshSummaryAlternative income programs are a common strategy used to reduce resource extraction and improve human welfare but it is unclear whether these programs are successful because they are rarely implemented with evaluation in mind. Taking advantage of a natural experiment in Kiribati, Central Pacific, we tested the effect of an agricultural subsidy on fishing and human welfare. We developed a model of household fishing and agricultural production and consumption. Contrary to predictions of this model and the programs aims, some households actually increased fishing and decreased agricultural labor. To explain these data, we developed an alternative model in which households also derive utility from labor in fishing. This model predicts heterogeneous responses conditional on household preferences for fishing, which was supported empirically. Households that were already heavily engaged in fishing fished more as a result of the subsidy. We estimated the effect of increased fishing on coral reef ecosystem services using underwater visual surveys. Although welfare may have been maintain over the study period, long-term welfare losses are expected due to declining fisheries and ecosystem services, as indicated by increased fleshy algae with fishing effort. Conservation-development strategies therefore need to consider heterogeneity in household behavior, non-market benefits from traditional livelihoods, and the long-term welfare consequences of ecosystem degradation. Some successful options might be to develop complimentary fisheries regulations, tourism based on catch-and-release sport fishing, community work programs, or increase the supply of consumable goods or recreational activities.  Background and Objectives The aim of this research was use economic and ecological methods to evaluate the effect of the 2004 copra subsidy on fishing, welfare, and ecosystem health in Kiribati. The research was motivated by the need to understand the effect of alternative income programs on resource use, welfare, and ecosystem health both in Kiribati and worldwide. Samasoni Sauni, PROCFish (Pacific Regional Oceanic and Coastal Fisheries) project leader at the Secretariat of the Pacific Community, noted that increased copra production has decreased pressure on the local fisheries (Sauni et al. 2005): “Wise management of the reef resource is but one aspect of securing future food security. Another is provision of alternative means of earning income. For example, the government's subsidy of copra production has eased pressure on reef resources. Some of the fishermen are now spending more of their time in copra production than in semicommercial fishing on the reef.” However, there was no empirical data supporting this claim and the true effect is uncertain (Sauni, personal communication). Consequently, this research program was launched, in cooperation with Kiribati Fisheries, to assess the true impact of the copra subsidy on fishing, welfare, and ecosystem health. Integrated conservation and development programs are wide spread because they are thought to provide win-win solutions for protecting natural resources and improving welfare. These programs often promote an alternative income, such as was done in 2004 in Kiribati with the copra subsidy. The expectation is that if people are offered more money in an alternative income, they will leave the resource extractive activity (such as fishing), thus reducing resource extraction and increasing their income. It is unclear whether these programs are successful because few are designed with evaluation in mind and most have major problems with selection bias because only the people who are least productive in the resource extractive activity enter the program. In addition, ecological data is rarely to evaluate the ultimate outcome for ecosystem health and sustainable welfare improvements. Kiribati provides a unique opportunity to properly evaluate an alternative income program because virtually all households in the outer islands have access to fisheries or land with coconut trees and Kiritimati, the largest island in the Republic of Kiribati, provides a test of the effects of increased fishing effort on ecosystem health using a space-for-time model. Understanding how the development of alternative incomes affects Kiribati’s fisheries and coral reef ecosystem health is critical because they are a primary source of income and wealth for the country. Methods Sheila Walsh visited the Kiribati Ministry of Fisheries from October to December 2006 to review existing data, help the Statistics Unit organize a database for artisanal fishing data, and design and test the household survey instrument for this project. Sheila returned to Kiribati in May and June 2007 to implement the household survey on Abemama, Kuria, N. Tarawa, and Kiritimati. These islands were chosen based on the probability that a household would be drawn from a random sample of the population (households per island/total households). The target number of households surveyed at each island was proportional to the population of the island. In total, 329 households were surveyed on questions covering the period 2001-2006 for a total of 1,974 observations, or a 2% sample of the population. Heads of households were surveyed after obtaining oral consent. The survey was designed to obtain data on income, labor, and production from various economics activities, income from other sources, capital related to fishing and copra, ownership of household goods, and household characteristics over the period 2001 to 2006. The survey also included discrete choice questions about general welfare, income options and satisfaction, and the status of the fishery and conservation. In July and August 2007, Sheila Walsh led a team of research divers to Kiritimati Island to assess the relationship between ecosystem health and fishing effort using a space-for-time model. Underwater visual surveys on other islands were not logistically feasible and would not have provided sufficient variation in fishing effort to predict the ecosystem consequences of the copra subsidy. Kiritimati is unique because its population is growing at a rate of 10 to 20% per year due to a population re-settlement program, which has established additional settlements primarily on the northern coast. With about 60% of the coastline unpopulated, Kiritimati provides an extreme gradient in fishing effort. Across this gradient, 37 sites on the fore-reef at 10-12 m depth were surveyed to estimate fish abundance and biomass using the belt transect method and percent cover of benthic organisms using the photoquadrat method. PADI funds received in 2009 were used to re-survey the fish and benthic communities at 31 sites in order to assess the validity of the space-for-time model and the effects of continued population growth due to the re-settlement program Theoretical models of household behavior were developed to formalize hypotheses regarding the effect of the copra subsidy on fishing labor and welfare. These hypotheses were then tested using the data collected from the household survey. The effect of changes in fishing labor on ecosystem health was then estimated using ecological survey data. This unique data set provides one of the first economic and ecological evaluations of an alternative income program. Conclusions The copra subsidy in 2004 did not decrease fishing. Contrary to its intention, fishing actually increased. This trend is best explained by households considering non-monetary benefits associated with fishing. However, the subsidy did succeed in maintaining or improving welfare. Yet, it is expected that welfare will decline in the long-run as a result of increased fishing because overfishing reduces fish stocks and reef-builders, which provide protection from storms and sea-level rise. The majority of households say that fishing became more difficult over the period and over 91% of households think that something needs to be done to ensure healthy fisheries in the future. The majority of households are not satisfied with their current income and many would like to increase their income by remaining in fishing. These results suggest that any future copra subsidies must be complimented by fisheries regulations or the creation of marine reserves or marine tenure systems in order to compensate for the resulting increase in fishing labor. Other strategies that may be considered include 1) promoting tourism based on catch and release sport fishing because it would be an occupation that still involves fishing, 2) increasing the supply of desirable goods for households to purchase so that the need for cash, and hence copra labor, increases, 3) developing community programs that provide vouchers for school fees or health services contingent on working on community projects, such as maintaining maneabas or council buildings, or 4) promoting recreational activities that substitute for fishing and have health benefits. See the full report with methods and discussion This material is based upon work supported by the National Science Foundation under Grant No. 0333444.
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