and provides low-interest loans (5.2 percent per aimuni 

 in May 1993) to small and medium-class fishery 

 companies having fewer than 300 employees and 

 aggregate fishing vessel tonnage of less tlian 3,000 

 GRT. Construction of the following types of vessels 

 are eligible for loans under this program: tuna 

 longliners (up to 580GRT), skipjack pole-and-liners (up 

 to 500GRT), purse seiners (up to 1 .OOOGRT), medium- 

 sized squid jiggers (up to 138GRT), offshore trawlers 

 (up to 160 GRT), and East China Sea trawlers (up to 

 250GRT). 



The second program is called tlie "Fishing Vessel 

 Fund," and is also administered by the Agriculture, 

 Forestry, and Fisheries Finance Corporation. This 

 program provides low interest loans (4.8 percent per 

 annum as of May 1993) to small and medium-class 

 fishery companies not eligible under the first loan 

 program described above. Construction of surimi and 

 hokuten trawlers, and large .squid jigging vessels are 

 eligible for loans under this program. 



The tliird program is called the "Distant-Water 

 Fi.sheries Development Fund," and is administered by 

 the Japan Development Bank. The fund provides low 

 interest loans (4.7-5.1 percent per annum as of May 

 1993) amounting to 40-60 percent of the total cost of 

 vessel construction to large fishery companies having 

 more tlian 300 employees and aggregate fishing vessel 

 toiuiage greater than 3. OOOGRT. 



Tlie construction of new fishing vessels having less 

 tlian 500GRT continued at a relatively steady pace until 



1991 . but the construction of vessels over 500 GRT has 

 virtually stopped (appendix CC). The number of newly 

 constructed fishing vessels decreased to successive all- 

 time lows in fiscal years 1991/92 and 1992/93. A total 

 of 278 vessels with a capacity of 16,045GRT was 

 constructed in FY 1992/93, compared to 342 vessels 

 (30,824GRT) built in FY 1991/92. Demand for new 

 fishing vessels has been dampened by depressed fish 

 prices, the increased cost of new vessels, and a 

 shortage of fishing labor. With a continued bleak 

 outlook for fiscal year 1993/94, fishing vessel builders 

 are starting to explore conversion to odier types of 

 shipbuilding, .such as the construction of coastal 

 shipping vessels.-' 



A good example of the bleak situation facing the 

 Japanese fishing vessel construction industry can be 

 found in Nagasaki, where 70 percent of Japan's purse 

 .seine vessels were constructed until 1991. Only 12 

 purse seiners were licen.sed to be built in Nagasaki 

 during 1991, and only 3 purse seiners were licensed in 



1992. Nagasaki shipyards once built only purse 

 seiners, but the depressed demand has forced them to 

 focus their energies on alternative products, such as 

 small cargo vessels and tankers for domestic and 

 overseas routes." 



IV. Government Regulation of Fleet Size 



III. Current Status of Shipbuilding 



Despite the availability of low-interest governmeni 

 loans, an analysis of fisheries-related shipbuilding 

 points to an industry in decline. Large shipyards which 

 build not only fishing ve.s.sels, but also oil tankers and 

 passenger/cargo vessels, have not been as iiard hit by 

 the reduced demand for fishing vessels. Smaller 

 Japanese shipyards which primarily build fishing 

 vessels, however, have been severely impacted.-" The 

 number of shipyards building fi.shing vessels has been 

 halved during the 1980s, falling from 58 in 1980 to jusi 

 23 in 1991 (appendix AA). The corresponding nuiiiher 

 of vessels built decreased from 210 in 1980 to 97 in 

 1991. Only new tuna vessels and purse seiners are 

 being constructed, with no new construction of trawler 

 or salmon driftnet vessels (appendix BB). 



The Japanese Government implements a licensing 

 system (or limited-entry system) to control die size of 

 the fishing fleet. Distant-water and offshore fishing 

 vessels are licensed by the Ministry of Agriculture, 

 Forestry, and Fisheries (MAFF). Coastal and inland 

 fishing vessels are licensed by prefectural governors 

 pursuant to authority delegated by the MAFF minister. 

 This licensing system is considered a Goveninient 

 effort to decrease the Japanese fishing fleet size from 

 its current level. When a distant-water fishing vessel 

 is forced to retire because of reduced fishing allocations 

 from foreign countries, it may not be relicensed for 

 coastal fishing and must be scrapped. 



Government subsidies are available under a special 

 law for fisheries restructuring (Law Number 43-1976) 

 for small-medium class companies (i.e. companies 

 with fewer than 300 employees and aggregate vessel 

 tonnage of less than 3, OOOGRT) which retire vessels 



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