Impact of fuel subsidies on fishermen income: a case study of small scale fishermen in Kedah and Perlis

The purpose of this study is to investigate the impact of fuel subsidies on income of fishermen operating in Zone A and Zone B in Kedah and Perlis. The Zone A fishermen are small-scale fishermen operating within 5 nautical miles from the coastline and using traditional fishing gears such as scoop net and drift net. Zone B fishermen are commercial fishermen operating within 5-12 nautical miles from the coastline using drift net and trawl net. This study employed both primary and secondary data. The primary data were gathered directly through face-to-face interview using structured questionnaires with skippers of the boat. The secondary data such as fuel subsidies, catch incentives and livelihood incentives were collected from Department of Fishery (DOF) and Lembaga Kemajuan Ikan Malaysia (LKIM). Fishermen's income in the study area is modeled as being influenced by the quantity of fuel subsidy received by fishermen, the incentive value of catch received, monthly allowance, fishing activity location, and socioeconomic background of fishermen. This study indicates that Boat B fishermen gained more benefits from the implementation of subsidized fuel policy than Boat A fishermen because they use larger boat sizes and better fishing gear. In addition, variables such as fuel subsidy, operating costs, and duration of fishing hours influence on fishermen income. Although fuel subsidies may contribute toward overfishing, yet, fuel subsidy is still needed by small-scale fishermen since it can reduce the cost of fishing activities and thus increase their monthly income. Therefore, this research has shown that fuel subsidy is an important determinant in reducing fishing cost and increasing the fishermen’s income