Fishermen strike over fuel costs

Reuters reports on the fishing strike that took place yesterday in Japan:

Should the fishing industry receive government subsidies to offset high fuel costs?

5 comments - What do you think? Posted by James - July 16, 2008 at 7:54 am

Kevin

From what I saw on the news last night, their haul of fish seems to be decreasing. I don’t know if this is because of environmental reasons or what, but squid fishing has apparently become pretty painful. The amount of squid caught doesn’t even cover the cost of gas.
Another thing that the news mentioned was that Tokyo is keeping prices low but outlying regional fishermen can’t keep up with their low prices. I think they are trying to get the cost of fuel subsidized by the government because it has tripled from 38yen to around 106 yen in only 5 years.
stereo

>Is there a reason they can’t RAISE THEIR PRICES to counter the high fuel costs?

They cannot and that is the problem. The prices of fish are determined by auction markets, where the highest “buyer” determines the price. The highest buyer does not care or even does not know the fuel costs of what he is buying. So, the increase in fuel costs does not directly influence the buying price.

The only thing that the fishermen can do is to limit the supply of fish. That is what they are doing right now.

http://www.victorymanual.com Alex

The way the market works is this – If the supply and demand of any given item don’t meet requirements meant by both sides, then the sale does not go through. If they can’t afford to sell squid, then naturally they will have to stop selling squid. Available squid will be decreased, the price will increase. With an increase in prices, some will return to selling squid, until a balance is reached.

Government interaction is going to do more harm than good. This is going to be another case of alfalfa farmers, where the more squid they don’t catch, the more money they receive. They’ll make a cool living on not catching squid. I may become a squid fisherman myself!
http://www.pacificmorningpost.com Martin

It seems that Japanese fishers are united with their European Union brethren that they are unable to get a good price for their fish — higher cost should be higher prices.

If they cannot get a fair price through the current distribution channel, maybe set up their own? They have the fish, there is demand…