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Cablegate: Goj Launches New Supports for Fishermen in Face Of

VZCZCXRO5291
PP RUEHPB
DE RUEHKO #2174/01 2200748
ZNR UUUUU ZZH
P 070748Z AUG 08
FM AMEMBASSY TOKYO
TO RUEHC/SECSTATE WASHDC PRIORITY 6419
INFO RHMCSUU/DEPT OF ENERGY WASHINGTON DC
RUEHBY/AMEMBASSY CANBERRA 2721
RUEHLO/AMEMBASSY LONDON 2154
RUEHMD/AMEMBASSY MADRID 0831
RUEHMO/AMEMBASSY MOSCOW 2470
RUEHNE/AMEMBASSY NEW DELHI 8565
RUEHFR/AMEMBASSY PARIS 6237
RUEHUL/AMEMBASSY SEOUL 0780
RUEHWL/AMEMBASSY WELLINGTON 1043
RUEHBS/USEU BRUSSELS
RUEHOT/AMEMBASSY OTTAWA 9713
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

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