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PP RUEHPB
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P 070748Z AUG 08
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INFO RHMCSUU/DEPT OF ENERGY WASHINGTON DC
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RUEHPB/AMEMBASSY PORT MORESBY 0137
RUEHIN/AIT TAIPEI 7103

UNCLAS SECTION 01 OF 02 TOKYO 002174 
 
SIPDIS 
 
STATE FOR OES/OA/OMC (Holly Koehler) and EAP/J 
DOE FOR 
 
E.O. 12958: N/A 
TAGS: EFIS ENRG PGOV SENV JA
SUBJECT: GOJ LAUNCHES NEW SUPPORTS FOR FISHERMEN IN FACE OF 
PRESSURES OVER RISING FUEL COSTS 
 
¶1.  SUMMARY: Responding to fishermen's anger over higher fuel costs, 
the GOJ plans to introduce a USD 696 million emergency fisheries 
subsidies package starting August 2008 utilizing funds from the 
current Fisheries Agency of Japan (FAJ) budget.  A series of 
demonstrations and lobbying activities, culminating in a one-day 
strike July 15 by 200,000 fishermen nationwide to protest high fuel 
prices, put pressure on the ruling Liberal Democratic Party (LDP) 
and GOJ to decide to pursue emergency measures.  The LDP politicians 
engaged in creating the package stress that the issue is not about 
the fisheries industry per se, but about Japan's national interests 
and food security.  They are determined to continue the subsidies in 
the FY 2009 budget.  END SUMMARY. 
 
Compensate Fishermen Who Cut Energy Use 
--------------------------------------- 
 
¶2.  On July 28, the FAJ announced a new package allocating Yen 74.5 
billion (USD 696 million) from its current budget to aid fishermen 
suffering from skyrocketing fuel prices.  Prices of Bunker A fuel 
for fishing boats have tripled over the past five years in Japan, 
increasing 40 percent from December 2007 to July 2008.  Some 
fishermen have stopped operating due to losses resulting from the 
higher fuel costs.  Under the FAJ scheme, the GOJ will cover 90 
percent of the rise in fuel prices that has occurred since December 
2007 for groups of five or more fishermen who have taken steps to 
cut their fuel consumption by ten percent or more through the 
purchase or installation of new, more energy efficient technologies 
and equipment.  Fishermen from anywhere in Japan and catching any 
species of fish will be entitled to apply for the relief program. 
The FAJ has allocated Yen 8 billion (USD 74 million) for the plan. 
The FAJ will also launch a new JPY 20 billion (USD 186 million) 
interest-free loan scheme to help fishermen finance purchases of new 
energy efficient equipment. 
 
Japanese Fish Distribution and Auction System's Problem 
--------------------------------------------- ---------- 
 
¶3.   Japan's complicated fish distribution and auction system 
prevents the country's fishermen from passing higher fuel costs on 
to consumers.  The FAJ package could improve distribution by 
subsidizing sales directly from fishermen to fisheries cooperative 
associations.  The associations can then immediately sell to 
retailers.  The FAJ has put together Yen 40 billion (USD 372 
million) for this direct purchase system.  The package also provides 
help for those who stopped fishing or reduced the number of fishing 
boats due to fuel price increases (Yen 6.5 billion = USD 60 
million). 
 
LDP Politicians Play Key Role 
----------------------------- 
 
¶4.  A series of demonstrations, culminating in a one-day strike July 
15 by 200,000 fishermen to protest high fuel prices, and lobbying by 
fishermen across Japan put particular pressure on the GOJ to create 
the subsidies package.  In the July 15 strike, over 3,000 fishermen 
rallied in Tokyo and adopted a resolution to request that the GOJ 
and LDP compensate fishermen for higher fuel costs, take 
full-fledged tax and other financial measures to sustain fishing 
operations, control speculative money in the international oil 
market, and provide stable fuel supplies.  Representatives from the 
JF Zengyoren (the country-wide federation of Japan Fisheries 
Cooperatives) and the Japan Fisheries Association, which 
co-organized the rally, met with then METI Minister Amari, then 
Financial Minister Nukaga, then Minister for Agriculture, Forestry 
and Fisheries Wakabayashi, Chief Cabinet Secretary Machimura, and 
the LDP fisheries division politicians, to demand the GOJ and LDP 
meet their requests. 
 
¶5.  According to a series of articles on the fuel issue in the 
"Suisan Keizai Shimbun," a fisheries trade daily, LDP politicians 
who specialize in fisheries were the central force in creating the 
package.  At a July 28 LDP Fisheries Group meeting, the LDP's Acting 
Policy Research Council Chairman Hiroyuki Sonoda stated that 
fishermen's plight required urgent action, according to the 
newspaper.  The paper also quotes the LDP Research Commission on 
Fishery Policies Chairman Yasukazu Hamada as stressing the issue is 
 
TOKYO 00002174  002 OF 002 
 
 
not about the fisheries industry per se, but about Japan's food 
security.  Hamada plans to include fisheries subsidies in the FY09 
budget -- with the aim of reforming "the fisheries industry 
structure," according to the newspaper. 
 
No More Handouts? 
----------------- 
 
¶6.  Minoru Arimura, a reporter at the daily who wrote the series, 
told ECON FSN that based on the LDP-FAJ common agenda to sustain the 
fisheries industry and improve Japan's self sufficiency in fisheries 
products (currently 56 percent), LDP politicians and FAJ officials 
met and discussed the package and that the ruling coalition 
finalized it on July 28.  He recounted that in 2007, the FAJ ran a 
Yen 3.5 billion (USD 327) program to compensate fishermen for rising 
fuel prices.  However, it did not impose conditions like energy 
saving, so it had ended up being just a handout to fishermen that 
did not encourage energy efficiency.  The LDP and FAJ are determined 
to make sure the new package would lead to a more efficient 
fisheries industry, Arimura said. 
 
¶7.  COMMENT: While the higher energy prices hit industries across 
Japan, the GOJ package supporting fishermen clearly stands out. 
Industry insiders say that without the new policy, if the price of 
Bunker A fuel rose above Yen 130,000 (USD 1,214) per kiloliter, up 
from the current Yen 110,000 (USD 1,028) level, one third of 
Japanese fishermen would go bankrupt.  However, while the new 
package may provide some immediate relief to fishermen, with high 
energy costs for the foreseeable future, fundamental changes are 
needed for Japan to have a sustainable and efficient fisheries 
industry.   END COMMENT. 
 
SCHIEFFER