The inflated return from fisheries encourages new participants and expansion of fishing effort. These effects are exacerbated in situations where there are ineffective conservation and management measures. FAO's Fisheries Department paints a sobering picture of the quantum of subsidies provided to the world's fishing fleets. This figure indicates the magnitude of industrial subsidies paid worldwide to industrial fishing fleets. While FAO's methodology has been criticised as an oversimplification of the situation, even if the figures are only approximations, they are still substantial.
Some countries argue that there is no link between subsidies and over-capacity.
New Zealand believes that this is a difficult argument to maintain. It is difficult to understand how the artificial inflation of fishers returns does not affect their level of activity and so, the health of the marine environment Fishing industry subsidies encourage the use of fisheries resources above normal economic rates of exploitation. Inflated returns encourage excess capacity and overfishing, particularly in poorly managed fisheries. This activity has implications for the supply of fish to consumers and processors. These supply distortions place downward pressures on world seafood prices.