Japan’s Attempt at Aquaculture Policy Reform: A Case Study in Oyster Farming New Entry at the Fisheries Special Zone for Reconstruction in Miyagi Prefecture

Japan’s Attempt at Aquaculture Policy Reform: A Case Study in Oyster Farming New Entry at the Fisheries Special Zone for Reconstruction in Miyagi Prefecture

Published: 2020.10.13
Accepted: 2020.10.12
4
Professor
Meiji Gakuin University

ABSTRACT

Oyster farming in Miyagi Prefecture was negatively impacted due to the Great East Japan Earthquake of March 2011. Two months after the earthquake, the governor of Miyagi Prefecture, Yasuhiro Murai, announced a novel idea for the special zone as part of the reconstruction plan, in which outsiders’ new entry into oyster farming would be encouraged. Murai’s idea stemmed from his recognition that fishermen’s cooperatives were overprotected by the Fisheries Act, preventing outsiders’ new entry in oyster farming. In fact, the Fisheries Act stipulated that fishermen’s cooperatives should receive the highest priority in obtaining the exclusive rights for aquaculture (including oyster farming). The so-called reform-minded groups agreed with Murai’s idea for the special zone, but the so-called conservative groups have raised objections. According to these groups, fishermen’s cooperatives have various responsibilities in coastal fisheries, and thus, granting them a favorable position to obtain exclusive rights for aquaculture is reasonable. In response to Murai’s proposal, the Japanese government set a Fisheries Special Zone for Reconstruction in Miyagi Prefecture in December 2011. While outsiders’ new entry to oyster farming was ultimately allowed at the special zone, expert evaluations of outcomes of the new entry have differed.

INTRODUCTION

Japan has a unique licensing system for aquaculture[i]. For each water location, an individual (including a legal entity) can only engage in aquaculture if he or she is granted the exclusive right for aquaculture by the prefectural governor. For years, in most water locations, it has been difficult for those who were not members of local fishermen’s cooperatives to participate in aquaculture. This is because the Fisheries Act prioritized fishermen’s cooperatives in obtaining the exclusive right. However, an increasing number of voices in reform-minded academic, business, and political groups have advocated for opening the window to outsiders to “let some fresh air” into aquaculture. Simultaneously, however, a strong conservative view has been that fishermen’s cooperatives deserve priority, as they take responsibility for organizing all the fishermen in coastal areas according to their common interests.

In December 2011, the Japanese government established a Fisheries Special Zone for Reconstruction (FSZR) in Miyagi Prefecture, one of the most heavily damaged areas from the Great East Japan Earthquake. As an exception to the Fisheries Act, outsiders in this prefecture who satisfied certain conditions were given the same priority as those in the fishermen’s cooperatives to obtain exclusive rights for aquaculture. This provoked a fierce argument between those who supported deregulating Japan’s aquaculture policy and those who opposed it. By reviewing the history of Japan’s aquaculture policy and the FSZR performance, this paper explores a new direction in Japan’s policy on demarcated fishery.

HISTORY OF JAPAN’S FISHERY POLICY

Microeconomics textbooks describe the fishery industry as a typical example of the “tragedy of the commons,” in which people would devour all the common resources in a laissez-faire economy. More precisely, in terms of fishing, if everyone were allowed to fish freely, they would try to catch all the fish before others people did so. As a result, marine resources would be damaged to the point of being unrecoverable. In contrast, only if all the people with marine resource access agreed to follow an agreement to maintain the total fish catch at a renewable level, they could eternally enjoy income from fishing. Thus, how to organize all fishermen along their common interests is the core problem in the fishery industry. In the post-Pacific War period, fishermen’s cooperatives played a key role in preventing the tragedy of the commons in fishing communities. However, their organizational abilities are weaker now, and Japan’s fishing system is at a turning point. To understand the current situation in Japan’s fishery industry (including in aquaculture), it would be useful to conduct a quick review of its historical development, as follows[ii].

 Japanese territorial waters are abundant in various types of marine resources. This is because two major currents—the Oyashio and Kuroshio Currents—converge around the Japanese Islands, making various types of fisheries possible. To fully utilize Japan’s rich marine resources, fishing plans (i.e., plans to stipulate who should engage in what type of fishing at which coastal area within a fishing village) must be effectively designed and implemented. Historical records and legends indicate that in the feudal period, each fishing village had its own (usually unwritten) marine resource rules, which dictated how to protect resources (e.g., setting no-fishing periods and/or areas) as well as how to allocate efforts to and distribute benefits from the common fisheries (e.g., a beach seine fishery). This system was called Isson Sen-yu Gyojo Seido, and it ensured the villagers’ exclusive rights to use marine resources as vested by the feudal lords.

Even after the Meiji Restoration, the government recognized the effectiveness and usefulness of Isson Sen-yu Gyojo Seido, but one problem was that the system’s format was not compatible with the modern legal system. To formalize the system within the construct of modern law, the Meiji government required each fishing village to establish its own fishermen’s union, which would be responsible for supervising all the fishermen in the jurisdiction’s coastal fisheries based on Isson Sen-yu Gyojo Seido. Appointing fishermen’s unions as the coastal fisheries’ organizers in this manner served to authorize the rules of the system. This was a shrewd way to apply a more modern legal approach to the rules in the feudal period. Fishermen’s unions were remolded into fishery associations in 1943, as part of Japan’s militarization policy, and the organizing role for coastal fisheries was transferred from the fishermen’s unions to the fishery associations. Moreover, to carry out the objectives of the war economy, the fishery associations became responsible for controlling fishermen’s daily lives well beyond their fishing activities.

From 1945 to 1952, Japan was democratized under the leadership of the General Headquarters of the Allied Forces (GHQ). In 1948, as part of the GHQ’s democratization policy, fishermen’s cooperatives replaced fishery associations. Similar to the fishermen union system, each fishing village had its own fishermen’s cooperative. Fishermen (including legal persons) in a cooperative’s jurisdiction were qualified to become members[iii], but it was not compulsory for fishermen to join a cooperative. Nonetheless, an overwhelming majority of them decided to join, as the cooperatives organized traditional types of small-scale fishing in the coastal fisheries. Similar to fishermen’s unions and fishery associations, fishermen’s cooperatives organized the traditional small-scale fishing activities based on the principles of Isson Sen-yu Gyojo Seido.

The Isson Sen-yu Gyojo Seido system did not apply to newer types of fisheries, such as aquaculture, which developed after the Meiji Restoration. In the pre-Pacific War period, the prefectural governor used his or her own judgment to decide who should be licensed to participate in aquaculture. Experts, however, have pointed out that the prefectural governors’ management of the licensing system lacked transparency. Oftentimes, wealthy families in urban areas were able to obtain the licenses and reap profits by subletting the licenses to local fishermen[iv]. The Fisheries Act introduced a transparency rule regarding the issue of exclusive rights for aquaculture. This rule was carried out as follows.

Any economic entities (whether natural or legal persons) who wished to engage in aquaculture needed to apply to the prefectural governor for exclusive rights. In the case of multiple applicants for the same type of fishing in the same location, the Fisheries Act stipulated the following prioritization regarding to whom the right should be granted.

  1. The first (highest) priority: the fishermen’s cooperative in a fishing village.
  2. Second priority: a legal entity formed by more than 70 % of the individual fishermen in a fishing village.
  3. Third priority: a legal or natural person who has been engaged in fishing in a fishing village or elsewhere.
  4. Fourth (and lowest) priority: others.

The term for the exclusive right to aquaculture was five years, but as long as the rights-holders demonstrated the ability and will to continue engaging in aquaculture, they maintained the rights. As a result, in an overwhelming majority of cases, only fishermen’s cooperatives held aquaculture exclusive rights.

Water locations suitable for aquaculture often overlap with those suitable for traditional small-size fisheries. Thus, how to share a limited number of fishing locations became a serious problem. For years, fishermen’s cooperatives approached this problem by drawing on the sense of unity emphasized in the framework of Isson Sen-yu Gyojo Seido. The origins of this sense of unity lie in the traditional family system itself, considering that many families were a part of their fishing communities for generations. In those settings, the community’s rules regarding fishing (and life) commonly passed from father to son and from mother to daughter. Fishermen’s cooperatives also adopted this mode of transmission: the head of a fishing household would hold the membership in the fishermen’s cooperative, and this membership would be transmitted from a father or mother to a son or daughter.

Coinciding with the development of individualism during the post-Pacific War period, this sense of unity began to fade. In addition, lifestyles changed in Japanese families, and younger generations were less interested in continuing their family businesses. As a result, in many cooperatives, members were aging, and successors were few and far between. One possible solution to this challenge was for the cooperatives to recruit new members from the fishing community. However, fearing that new members would not honor the community’s rules and traditions, the cooperatives were reluctant to recruit them. In sum, Japan’s long-standing system of Isson Sen-yu Gyojo Seido was becoming outdated.

The so-called reform-minded groups are claiming that fishermen’s cooperatives have become “old guards” to protect the interests assured by the Fisheries Act[v]. However, these groups have not suggested who should take the place of the fishermen’s cooperatives in preventing the tragedy of the commons. This implies that finding an alternative to the long-standing Isson Sen-yu Gyojo Seido may be difficult. Meanwhile, so-called conservative groups point out that if the organization of fishermen continues to weaken, the risk of the tragedy of the commons will increase. In contrast to the more reform-minded cooperatives, conservative groups argue that the national and prefectural governments should provide more support for the fishermen’s cooperatives in order to avoid the tragedy of commons[vi]. However, this argument does not detract from the bitter reality that Isson Sen-yu Gyojo Seido have become outdated.

DEREGULATION OF THE FISHERIES SPECIAL ZONE FOR RECONSTRUCTION

Miyagi Prefecture is known as one of the major aquaculture areas in Japan. In particular, oyster farming in this area is highly profitable. While suitable locations for oyster farming rafts are geographically limited, many have expressed interest in entering or expanding production in oyster farming. Thus, it has become challenging to decide how to allocate limited oyster farming locations among fishermen. Fishermen’s cooperatives have been approaching this problem based on their experience organizing local fishermen in the coastal fisheries, but those who wish to partake in oyster farming and have thus far not been allowed have increasingly expressed their frustrations. Several politicians and business groups (in particular, the “market fundamentalists”) maintain that a greater openness to outsiders in oyster farming could vitalize local economies. For example, in 2007, the Japan Economic Research Board claimed that fishermen’s cooperatives unfairly monopolized aquaculture benefits and advocated for outsider entry[vii].

It was at this time that the Great East Japan Earthquake happened, and the subsequent tsunami destroyed oyster farming equipment and facilities (e.g., ladders, boats, and warehouses) in Miyagi Prefecture. However, the natural features of the oyster farming locations were not severely damaged. Thus, if equipment and facilities were to be reinstalled, oyster farming could return to its original condition. One difficulty is that the fishermen’s funding is limited, as most of them run small, family businesses. Some politicians have proposed that if large, private companies were to invest in oyster farming, it could accelerate recovery from the tsunami damage. Yoshihiro Murai, the governor of Miyagi Prefecture, is one such politician.

Two months after the Great East Japan Earthquake, Murai voiced the following idea in TV and newspaper interviews: to promote the reconstruction of Miyagi Prefecture’s fishery industry, Miyagi Prefecture should have a special zone where outsiders are given top priority to receive exclusive aquaculture rights. Murai’s idea was met with support from market fundamentalists, while conservatives opposed it. The Reconstruction Design Council (RDC), an advisory board for the Prime Minister, was pressured to respond one way or another to Murai’s idea. One month after Murai’s announcement, the RDC put forth a proposal, “the first recommendations for the FSZR,” recommending that legal persons (mainly established local fishermen) should be given the same priority as those in the fishermen’s cooperative to receive exclusive aquaculture rights. Following this proposal, the Japanese government established the FSZR in Miyagi Prefecture in December 2012.

The establishment of the FSZR frustrated fishermen’s cooperatives nationwide. In particular, the Miyagi Prefecture Fisheries Cooperative (MPFC), which conducts oyster farming at many water locations in Miyagi Prefecture, has repeatedly criticized Murai’s idea, arguing that the FSZR should be abolished. Moreover, even after the FSZR was established, outsiders’ entry has been quite limited. To date, Momonoura Producer of Oyster Consolidated Company (MPOCC) is the only one company to initiate oyster farming under the FSZR framework. MPOCC was founded in August 2012 by 15 local fishermen in the Momoura District of Ishinomaki City in the Miyagi Prefecture, and it began operations in September 2013. Unlike ordinary fishermen, MPOCC employees are engaged not only in oyster farming but also in producing oyster-based foods. To strengthen its financial position and broaden its line of business, MPOCC received capital from one of the biggest wholesalers of marine products in Miyagi Prefecture, Sendai Suisan, in September 2012. Miyagi Prefecture also supported MPOCC by providing subsidies of 550 million yen (nearly 5.2 million USD) as part of the company’s establishment.

MPOCC receives favorable treatment in the FSZR; thus, it is to be expected that MPOCC would be somewhat hostile towards MPFC. Interestingly, however, MPOCC applied for membership in the MPFC in September 2012, and the MPFC quickly approved MPOCC’s application. Neither MPOCC nor the MPFC has clearly justified these decisions. A possible explanation is that both the MPFC and MPOCC were attempting to avoid confrontation. In September 2013, MPOCC applied for the exclusive rights to aquaculture in the Momoura District. Since no other entity presented itself as competition (not even the MPFC), MPOCC was permitted to begin oyster farming in the Momoura District.

Business performance evaluations of MPOCC’s oyster farming have differed: some experts consider it “excellent” while others consider it “poor.” Indeed, MPOCC’s oyster production has been increasing, and the company has maintained a balance in the black. Thus, the Miyagi Prefectural Government (2018) has concluded that MPOCC is successful. However, MPOCC’s rate of oyster production increase has been lower than average in the Miyagi Prefecture, and the company relies heavily on the prefecture subsidies. Furthermore, the company had mislabeling issues in 2014 and 2015[viii]. As a result, some citizen groups disagreed with the Miyagi Prefecture Government (2018) and concluded that MPOCC’s entrance to oyster farming was unsuccessful[ix]. This paper’s purpose is not to make a judgement about whether MPOCC’s oyster farming entry was successful. Notably, oyster farming in Miyagi Prefecture is still recovering from the disaster of the Great East Japan Earthquake, and for this reason, it would be difficult to evaluate the business performance of a new entity such as MPOCC. More time may be needed to accurately assess MPOCC’s performance. In August 2018, MPOCC’s exclusive right to aquaculture in the Momoura District was renewed, as no other entity applied for it.

CONCLUSION

How to avoid and/or mediate conflict among fishermen in a limited coastal area presents quite a challenge. For years, fishermen’s cooperatives effectively addressed this problem by drawing on the sense of unity that permeated traditional fishing communities. However, coinciding with emergent individualism and changing work ethics in Japanese fishing communities, the traditional sense of unity has been fading. Hence, fishermen’s cooperatives are stepping back from their former organizational role in the Japanese fishery industry.

As discussed in the second section, a laissez-faire policy in the fishery industry would result in the tragedy of the commons. Thus, Japan needs a new system for organizing fishermen along their common interests. MOPCC’s new entry to aquaculture (and more precisely, to oyster farming) in the FSZR could be regarded as Japan’s first attempt at replacing fishermen’s cooperatives with outsiders in aquaculture. However, this does not mean that MPOCC plays a key role in avoiding and/or mediating conflicts among fishermen in limited coastal areas or in preventing the tragedy of commons. Furthermore, it is not clear whether MPOCC’s business performance is sustainable, as it relies on subsidies from the local government. The core problem is that a new system for organizing fishermen along their common interests is still lacking in Japan. As long as this problem remains unsolved, simple deregulation may not be useful in the Japanese fishery industry, including in aquaculture. This may be the most important lesson from the experience of the FSZR and MPOCC.

REFERENCES

Godo, Yoshihisa, “Japan’s Fisheries Act,” FFTC Agricultural Policy Database (Food & Fertilizer Technology Center for the Asian and Pacific Region), 2020.

Higashi Nihon Daishinsan Fykkyuu Fukko Shien Miyagi Kenmin Senta, Miyagi-ken Suisantokku no Kensho Kekkano Happyo nitaisuru Watashitachi no Kenkai to Teigen (Our view on Miyagi Prefectural Government’s evaluation on proposal Fisheries Special Zone for Reconstruction), 2018.

Japan Economic Research Institute, Gyoshoku wo Mamoru Suisangyo no Senryakuteki na Bapponnkaikaku wo Isoge (A proposal for Strategic Approach to Reform Japan’s Fishery Industry and Japan’s Seafood Culture), 2007.

Kase, Kazutoshi, San Jikan de Wakaru Gyogyoken (A Three-Hour Lecture on the Fishing Right System), Tsukuba Shobo, 2014.

Katsukawa, Toshio, Gyogyo toiu Nihon no Mondai (Problems in Japan’s Fishery Industry), 2012.

Kawai, Kazushge, Umi ga Kowareru Suisan Tokku (Fisheries Special Zone for Reconstruction may Destroy Japan’s Marine Resources), Koyo Shuppan, 2011.

Miyagi Prefectural Government, Miyagi-ken Ishinomaki-shi Momoura Chiku niokeru Fukko Suishin Keikaku no Kensho (Review on Reconstruction Program at Momoura District in Ishinomaki City in Miyagi Prefecture), 2018.

Union of Members of the Communist Party of the Miyagi Prefectural Assembly, Momoura Kaki Seisansha Godo Kaisha niyoru Tachikusan Kaki Ryu-yo Mondai no Tettei Chosa wo Motomeru Moushi-ire (Proposal for Comprehensive Survey on the Mislabeing Problem of Momonoura Producer of Oyster Consolidated Company), 2017.

[i] This paper discusses aquaculture on the sea surface only. While aquaculture also exists on freshwater surfaces and inland, these shares are limited in the total production of Japan’s aquaculture.

[ii] This section provides a broad outline of Japan’s fishery policy. For further details, see Godo (2020).

[iii] Legal entities engaged in fishing in the cooperatives’ jurisdictions and whose numbers of total employees and total ship tonnage are less than 300 and 1500, respectively, are also qualified to join the local fishermen’s cooperatives. In principle, those who do fishing fewer than 90 days at a cooperative’s jurisdiction are not qualified to join the local fishermen’s cooperative. However, this requirement for the minimum number of fishing days can be increased to 120 days if at the general meeting, the fishermen’s cooperative decides to allow it.

[iv] For example, see Kase (2014).

[v] For example, see Katsukawa (2012).

[vi] For example, see Kawai (2011).

[vii] For further details, see Japan Economic Research Institute (2007).

[viii] For further details, see Union of Members of the Communist Party of the Miyagi Prefectural Assembly (2017).

[ix] For example, see Higashi Nihon Daishinsan Fykkyuu Fukko Shien Miyagi Kenmin Senta (2018).

 

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