Poverty Alleviation in the Subsistence Fisheries Sector: A Microeconometric Analysis

This working paper applies the Foster Greer and Thorbecke (FGT) (1984) index of poverty measures to the subsistence fishing industry in South Africa in order to evaluate the impact of resource transfers on poverty. The sample of subsistence communities was identified by the Chief Directorate: Marine and Coastal Management of the Department of Environmental Affairs and Tourism. Data on these communities was taken from the Census (1996) and the October Household Survey (1995). The contribution of the paper is unique in that it modifies the expenditure equations of the FGT methodology to account for different species of fisheries, and in this way quantifies the impact of public sector poverty alleviation efforts. We are then able to estimate the impact on poverty and inequality relative to the quantities of rights transferred to subsistence communities by the state. The findings suggest that poverty can be completely eradicated in subsistence communities relative to a R1000.00 poverty line by allocating approximately 16.69 percent of the landed value or 6.12 percent of the wholesale processed (Free On Board) value of known subsistence fisheries to the recipients. Of course, this must be balanced within the context of scarce public resources, and a discussion of the opportunity costs of the transfer is given due regard. The technique developed is scalable and decomposable, making it ideal for use in planning exercises in the public domain.