plan, the provincial governments have set 

 up loan funds for construction of fishing 

 vessels at low interest rates. 



"The program had the following 

 objectives; 



(1) to enable the small-boat 

 fisherman to break away from his 

 dependence on outmoded techniques; 



(2) to create a climate of 

 opinion favorable to fleet modern- 

 ization generally, including the 

 expansion of dragger fleets; 



(3) to bring the primary fish- 

 ing industry in the Atlantic 

 region to a high level of effi- 

 ciency to bolster the competitive 

 position of the processing indus- 

 try which primarily serves the 

 export market. 



(li) to preserve ownership of 

 fishing vessels by fishermen." 38 / 



The combination of subsidy and loan 

 has enabled fishermen to build and own 

 fishing craft with a relatively small 

 equity position. Boat construction grants 

 as a percentage of original costs, in prov- 

 inces other than Newfoundland, have on the 

 average ranged from 15 percent to 29 per- 

 cent. In Newfoundland, govemment and 

 federal subsidies are as high as ii2 percent 

 of original cost. Borrowed funds, for 

 vessels other than for Newfoundland trap 

 long-liners, range from Ul to 81 percent. 

 For the same vessels, the cash down pay- 

 nents required of the fishermen have 

 ranged from a low of 9 percent to a high 

 of 37 percent of original costs. As much, 

 however, as 90 percent of the cash down 

 payment is also borrowed, so that the 

 original out-of-pocket investment is mini- 

 mized. Sometimes a source of the funds are 

 fish processing companies owning their own 

 large otter trawlers. 



The subsidized vassals are not com- 

 petitive with New England boats in the 

 sense that there are only a few craft oper- 

 ating identically to them in New England. 

 They are competitive in the sense that in 

 the aggregate these vessels land consider- 

 able amounts of groundfish. Nearly all 

 these landings are processed into fresh and 

 frozen fillets, most of which eventually 

 reach the United States consumer market as 

 products competitive with those of the New 

 England industry. It is desirable, there- 

 fore, to examine briefly the nature of and 

 role played by the subsidized vessels. 



Since the program began, construction 

 of these fishing craft has been about 

 equally divided into two types: long- 

 liners and draggers. The draggers are 

 roughly comparable to the small otter 

 trawlers ("dragger") of the New England 

 fleet and procure their catch through a 

 dragging operation similar to that of any 

 standard otter trawler. The Canadian 

 draggers range from 00 to 66 feet in length, 

 have a gross tonnage rtoge of 26 to 6k, 

 have a crew size of 3 to 5, are diescl 

 powered, run at 9 to 10 knots per hours, 

 and generally are equipped with electronic 

 fishing and navigational :iids. 



Long-liners generally use the hook and 

 line live -bait method to get their catch. 3$ 

 Instead of setting the lines from small 

 dories, however, all are handled from a 

 single 'ship through the use of a powered 

 gTirdy. The long-liners, with the exception 

 of the small Newfoundland trap long-liners, 

 range in length from U9 to 57 feet, have a 

 gross tonnage of 28 to Sh, carry a crew of 

 k to -6 men, cruise at 8 to 10 knots, and, 

 in the case of the larger ones, are 

 equipped with electronic navigational aids. 



So far only 1,000 to 1,200 fishermen 

 have bscn affected by the modernization 

 program, although their aggregate landings 

 of groundfish were about 150 million 

 pounds in 1957. This was about 17 percent 



38/ Excerpt from paper "Purposes of Co sts-and -Earnings Studies in Fisheries: The 

 Govemmgnt'E Point of View", by W. G. MacKenzie, Department of Fisheries of Canada, 

 Ottawa, Ontario, presented at F.A.O. meeting on Costs and Earnings of Fishing Enter- 

 prises, London, 8-13, September, 1958. Reprinted in Fteport of the Technical Meeting 

 on Costs and EamJngs of Fishing Enterprises , Food and Agricultural Organization of 

 the United Nations, London: 1959, P. 13. 



39/ Except when swordfishing where line gear is not required. 



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