The increase in commercial fisheries production over the last 50 years has been accompanied by an increase in the level of incidental catch and discarding of a number of species. Approximately one quarter of the marine commercial catch destined for human consumption is discarded at sea. This has raised the concern of a number of groups in society, including environmentalists, humanitarians and fishers themselves. In this paper, the economic incentives to discard fish are examined. The effects of different managemenet policies on these incentives are also investigated. The concept of an optimal level of discarding is discussed taking into account the externalities that can be created by discarding. Finally, the effectiveness of various measures to reduce the level of discarding is reviewed. these including technical, administrative and economic measures.