This was my initial thought.
That is until I learned that the subsidy cuts are targeted to C2 class fishermen, essentially the big, deep water boats (beyond the 30 nautica miles from shore) with at least 70 gross registered tonnage (GRT) in capacity. For 2009, Peninsular C2 operators brought in a whopping RM 795 million in wholesale value with each boat averaging RM 920,000 yearly Each C2 boat brought in RM 77,000 monthly and with super subsidy diesel expenses reported to be at RM 35,000, the fishermen monthly gross income would range between RM 30,000 to 40,000 monthly. Of course, this amount is to further pay for workers and maintenance (boat, engine etc) still most probably, we are looking at a clean income of RM10,000 to 15,000 a month. And with some of them operating more than 1 boat, their income could be more. Not bad, huh? Honestly, I don't mind seeing subsidy for these kind of people being cut! The minister even claims that the fishermen have been exploiting the system, landing their fishes in foreign ports instead of ours. In other words, our money might have been used to subsidize other countries' fishing industry! Economic treason? Hmmm.
But these middle-class fishermen are leaving on fragile social safety net. With the super subsidy of RM 1.25 gone, and now having to pay RM1.80 diesel per litre, the operating cost increased by a further RM15,000. That would be an at least 45% cut to their gross income. Do remember that the gross income is to pay for workers, maintenance (boat, engine etc.) and other miscellaneous expenditure. It does sound plausible that some C2 operators can't afford to work without the subsidies. The fact is the bulk of their income is the subsidy itself! As much as we would like to think that deep water fishing with its multi-million dollar in value does not justify to be subsidized, we should have the compassion to acknowledge that there are fishermen out there whose livelihood is indeed threatened by this policy change.
I think the C2 boat operators can live without the diesel subsidies if they can up their game and increase their productivity. But to increase productivity and competitiveness is more than about increasing incentive. It is about adopting an industrious workmanship and using industrial, environment-friendly tools and practices. And all those things take time and effort. What I think at fault here is the sweeping, sudden cuts that have caught many of them off guard and without preparation to adjust. It is an unfortunate situation because the consumers are already bearing the impact as fish supplies drying and prices at certain places are already at 30% more. So this is my take on the issue;
1. Return the subsidies but make the fishermen agree to participate in a change-management plan. Expand the government "Lab" transformation program to include our fishing industry by instituting case-studies on how our fishing community can further reduce operational cost. Look for best practices and train the fishermen how to replicate. If we can do that to our retail sector with Kedai Rakyat et'al, why not our C2 fishermen?
2. Redirect our subsidies orientation from OPEX to CAPEX with an eye towards better productivity. The government should consider redirecting the RM 226 million saved from the subsidy cut by giving grants to the fishermen to acquire cost-saving fishing equipment/tools and training. So, instead of getting them hooked to subsidies, we are empowering them to become competitive and productive and preparing them for a life without subsidy.
Again, case studies are important. Instead of introducing sweeping change at the industry-level, focus on communities so that our policy instruments can be more targeted and precise. We must appreciate the fact that what works at Kuala Sedili may not work best at Pulau Ketam. The Grameen system in Bangladesh has proven that a social approach by focusing on communities works wonders in addressing poverty issues as opposed to the standard, macro solution we are so accustomed to. This would mean properly allocating the RM 226 million and sending our foot soldiers - economic experts, activists and bureaucrats to work hand-in-hand with the fishermen themselves to produce market-based solutions, community by community. In all, there are 97 fishing communities around the country. From that 97 communities, only 1800 plus boats are involved in deep water fisheries. Please don't tell me, with the right kind kind of manpower and organization, we can't send experts to assist our fishermen to restructure our sea-fishing industry! What use are then our professors, PhD and Masters holders with their hundred thousands of research grants waiting to be utilized? Where are our so-called policy experts? Its time that they are send to the ground to do real field work. The problem is we never really attempt to solve the problem. A study few years back reveals that fishermen never knew of a RM 25,000 grant made available to them to buy a new boat. Even if they knew, no one is around to help them with the paperwork and procedures. Its a good policy let to rot.
I am greatly inspired by the Bill & Melinda Gates Foundation initiative last year. When the Obama Administration announced the USD 4 billion 'Race to the Top' school grant , the Foundation provided funds and experts to needy schools to help them compete with the more established schools to win those grants. Similarly in our case, our fishermen must not only have access to better yielding equipment and tools, they must also be coached on ways to become more industrial and productive. Yes, its a lot of work but to break the vicious poverty and complacent cycle plaguing our fishermen community, nothing short of concerted, hollistic effort is required. Only then, their dependency on subsidies can be stopped. By focusing on community-by-community, we can strive towards making some quick wins which can then be publicized as a model of change for others to follow.
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Coincidentally, the picketing boat masters are dominantly Chinese, which brought us to an interesting irony; that the degrading label "bangsa subsidi" is no longer exclusively Malay. Perhaps when the PM said that we Malaysians are "addicted" to subsidy has a bit of hard truth in it. Subsidy mentality really is a Malaysian thing, not just the Malays!
