Japan's Squid Fishing Industry

WILLIAM G. COURT

..

Introduction

Dried-squid (surume) has been anitem of commerce, ceremony, and dietin Japan for hundreds of years, andsquid is caught and is a popular foodthroughout the island nation.

Immediately after World War II,food shortages, a surplus of labor, andthe low capital investment required forsquid jigging stimulated the rapid de­velopment of the fishery. In 1952 squidlandings reached 646,730 tons and, at15 percent of the total, became Japan'smost abundant landing.

Until the mid-1960's most landingswere dried and much of the product wasexported to China. Since then domestic

... markets have been developed for a widevariety of fresh, frozen, and processedproducts and demand has increased.

The main cause of worldwide de­velopments in squid fisheries within thepast decade has been the inability ofJapan's squid fisheries to continue tomeet this demand from waters adjacentto Japan. The overseas extension of Ja­pan's squid fisheries and the rise offoreign squid fisheries to supply Ja­pan's markets attests to this. Todaysqu id resources are depleted in Japan'swaters and the nation's overseas squidfisheries are increasingly restricted.Consequently, Japan's squid importsare increasing and its squid fishing in­dustry is actively seeking and par­ticipating in joint ventures overseas.

What opportunities does Japan'ssquid market offer the U.S. fishing in­dustry? Unlike salmon and crab, themajor U.S. exports to Japan, squid is arelatively low-value item and it iswidely available in the waters of na­tions with fishing costs considerablylower than those of the United States.

July-August 1980

Korea, Thailand, and Taiwan have es­tablished squid fisheries, a qualityproduct, and good access to Japan'smarkets, and many other nations areactively developing squid fisheries tocompete for that market. Con­sequently, increases in supply may holdsquid prices down (Rodgers, 1979).

Also, Japan prefers frozen to pro­cessed imports and this discouragesprocessing and the investment oppor­tunities it offers. Furthermore, Japan ismore interested in joint ventures orother access to foreign fishing groundsthan in merely purchasing squid, andsome nations are more disposed to sucharrangements than is the United States.Thus the United States faces severecompetition, and it will be difficult toestablish squid markets in Japan. Thefollowing discussion attempts to intro­duce Japan's squid fisheries and mar­kets and to provide some backgroundagainst which to evaluate strategies fordeveloping the U.S. squid fishingindustry.

The Fishery

Japan's domestic landings have beendecreasing since reaching a record highof 773,777 tons in 1968, and althoughTodarodes pacificus (Steenstrup) pre­dominated until 1970, the compositionof the landings has changed markedlysince then (Fig. 1). Depletion of the T.pacijicus resource was influenced by

William G. Court is a research student at theTokyo University of Fisheries, 4-5-7 Konan,Minato-ku, Tokyo 108, Japan. Home Address:c/o HASHIO, 3-7-9 Kita, Koenji, Suginami-ku,Tokyo 166, Japan. Views or opinions expressedor implied do not necessarily reflect the positionof the National Marine Fisheries Service, NOAA.

oceanographic changes, but it is nowwidely attributed to overfishing.

Increased catches by Japanese boatsoverseas have characterized the past 10years. In 1977 this figure reached about18 percent of Japan's total squid land­ings of 490,000 tons and continues torise. Squid imports have been increas­ing since initiated in 1971, and in 1978achieved a record high of about100,000 tons, or 10 percent of the vol­ume of total fishery imports.

In 1978 over 85 percent of the land­ings in Japan's waters consisted of T.pacijicus and Ommastrephes bartrami(LeSueur). Loligo pealei (LeSueur)and lllex illecebrosus (LeSueur) fromthe northwest Atlantic, lllex argen­tinius (Castellanos) from Argentinewaters, Nototodarus sloani gouldi(McCoy) from Australia, and

700

o '--------'-_--'-_L-----L_-'----'__1963 1965 1967 1969 1971 1973 1975 1977

Year

Figure I.-Japan's squid landings,1963-77. Solid line = "Surume­ika" (Todarodes pacificus,Nototodarus sloani sloan;, etc.);dashes = other squid (Ommastrephesbartrami, Loligo spp., etc.).

1

Nototodarus sloani sloani (Gray) fromNew Zealand constituted most of Ja­pan's overseas landings. Imports weredominated by the same species with theexception of O. bartrami.

About 70 percent of Japan's squidlandings are caught by jigging, a simplemechanized method which usuallytakes place at night when bright over­head lights attract the squid. Jigs, 6-cmlures with clusters of unbarbed hooks,are secured at 90-cm intervals on amonofilament line which is continu­ously lowered and raised with a jiggingmotion at depths of 30 m to more than140 m. Squid, attacking the movingjigs, ensnare their tenacles on thehooks. The jigs shift to a horizontalposition when reeled aboard, and thusthe squid readily become disengaged.

The percentage of squid landed byjigging is declining; other fishingmethods include use of drift gillnets, setnets, and bottom trawls. Most of Ja­pan's squid fishing off North America,Argentina, and Africa, and some of thatin home waters, is by trawlers. That offNew Zealand is by a combination oftrawlers and jigging boats. In 1979,jigging on a limited scale began offeastern Canada.

Trawling endangers both squid andother resources because it catches ev­erything without discrimination andseems to damage small squid which es­cape through the mesh. Jigging catchesonly squid and exerts less pressure onthe resource per unit of effort than doestrawling. Therefore, as a resource man­agement measure, the Canadian Gov­ernment has reportedly considered en­couraging the foreign boats fishing forsquid within Canada's 200-mile zone toshift to jigging (Watanabe').

Japanese squid jigging boats are di­vided into three classes: Small-scale,1-30 ton; medium-scale, 30-100 ton;and large-scale, 100-500 ton. How­ever, the Japanese system computesfishing boat tonnage at one-half toone-quarter of the value which wouldbe assigned by standard classification

'Hidenobu Watanabe, Managing Director,Ogura Fisheries Company, 2-7 Bandai Shima,Niigata-shi, Niigata-ken, Japan 950. Pers. com­mun.

2

Typical Japanese squid jigs. Photocourtesy of the Yamaha FisheryJournal.

schemes. Most smaller boats are madeof either wood or ferro-reinforced plas­tic while steel hulls predominate inthose over 50 tons.

Since 1963, the proportion of land­ings made by jigging has changedmarkedly by size of boat. The percent­age of landings by boats less than 3 tonsand by 10-50 ton boats has decreasedalmost two-thirds and that of 3-10 tonboats has remained constant. Thelarge-scale and 90-100 ton boats madeless than 5 percent of the landings in1963 and now account for over 50 per­cent of the total. These changes reflectthe increase in the scale of the boats,the shift in the focus of the fishery fromcoastal to offshore waters, and the de­velopment of Japan's overseas jiggingfisheries.

Of the approximately 30,000 small­scale boats which jig for squid, 86 per­cent also fish for other species. How­ever, 42 percent of the medium-scaleboats and all of the large-scale boatsfish only for squid. The number ofmedium-scale boats has decreased to2,300 in the past 6 years, but thenumber of 90-100 ton boats has in­creased. Of the latter, 646 or 77 percentare highly efficient, specially designedsquid jigging boats. The number oflarge-scale boats has been fixed at 212since 1973, but through license transfertheir average size has increased annu­ally. Most of these boats are formertuna long-liners, but recently severalsuch boats have been designed and builtspecifically for squid jigging.

One of the most important pieces of

equipment is the electric generatorwhich, because of the high power de­mand of the squid-attracting lights, ­may have a capacity of as much as 300kW on a 30-ton boat. However, manyfeel such bright lighting is unnecessaryand wastes precious fuel. There are un­enforced limits on the power of light­ing, but gross violation is reportedlycommon. However, the Kudo FisheriesCooperative Association in southernHokkaido, the northernmost of Japan'smain islands, has for 10 years limitedits 10-ton boats to 15 kW, and thiscooperati ve has one of the best landingsand income records in the region.

Most boats over 90 tons and some ofthe smaller ones have freezing equip­ment on board. The 90-100 ton boatsusually have a freezing capacity of8-12tons and the larger boats 10-17 tons perday, and an experienced crew mustwork a hard day plus overtime to freezethis amount. Virgin grounds with a lim­ited number of boats could yieldcatches in excess of these quantities, inwhich case access to large-capacityshore-based freezing and storagefacilities or other arrangements wouldhave to be made. However, the catchper unit effort (CPUE) on the Japanese ­and New Zealand fishing grounds is notsufficient to make this a problem.

One of the 99-ton boats jigging ex­perimentally off eastern Canada hasbeen specially equipped with expandedfreezing capacity. However, limitedstorage space on this size boat necessi­tates frequent trips to shore, thus reduc­ing time on the fishing grounds and, inturn, efficiency.

The high costs of large-scale boatsdiscourages their use by the coastal na­tion. Therefore a barge-mounted, highlyautomated freezing plant might be con­sidered for use in conjunction withsmall- and medium-scale boats for theoffshore fishery. Another applicationfor a barge might be for preliminaryprocessing at sea to avoid expensiveland-based waste-water treatment anddisposal problems. Some Japanese pro­cessors feel that this would require sucha large barge and would entail so manylogistical and other problems as to beunfeasible; however, one U.S. com­pany is considering it.

Marine Fisheries Review

Figure 2. -Japan and adjacent areas.

CHINAHokkaido has traditionally been a

major focus of Japan's squid fishery,and the squid fishing industry is stillcentered in northern Japan. The Tsug­am Strait runs betweek Hokkaido andAomori, the prefecture at the northernextremity of Honshu, Japan's main is­land, and connects the Pacific Oceanwith the Sea of Japan. Strategic loca­tion on this waterway provides accessto the major squid fishing grounds andis an important factor in the prominenceof this area in the industry (Fig. 2).Hokkaido and Aomori, home of38 per­cent of the medium-scale and 55 per­cent of the large-scale squid jiggingboats, accounted for well over half ofJapan's squid landings in 1978. Some2,000 companies scattered throughoutJapan process squid and it is the mainproduct of 200 of these. However, pro­duction is concentrated in and aroundHakodate, a port in southern Hokkaido;Hachinohe, Aomori's major port; andOhata, an Aomori port on the TsugaruStrait. Leading manufacturers of squidprocessing equipment and the majorproducer of automatic squid jiggingmachines are located in Hakodate andadjacent areas.

The fishery for T. pacificus begins inMay with fishing for small squid offwestern Kyushu and gradually movesnorthward as the growing squid swimtoward the nutrient rich waters offnorthern and eastern Hokkaido. Arealdifferences in fishing seasons lead tointerregional friction and competitionas many boats from various parts ofJapan follow the migrating squid.However, this practice is threatened bythe difficulty of obtaining fuel supplies,especially for boats away from theirhome port.

Initially, the squid jigging fisherywas primarily a nearshore fishery bysmall boats, but with the automation ofjigging and increases in the value ofsquid, boats were enlarged and fishinggrounds extended. Until the late 1960'smost of the larger boats fished in thePacific southeast of Hokkaido. How­ever, landings decl ined precipitouslyafter 1968 and the focus of the offshorefishery shifted to the autumn subpopu­lation of T. pacificus in the central partof the Sea of Japan. In 1975 a jigging

July-August 1980

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fishery for O. bartrami developed in thenorthwest Pacific east of Hokkaido andnortheast of Honshu, and in 1978 thisspecies accounted for almost half of thesquid caught in Japan's waters.

In 1978 a major drift gillnet fisheryfor O. bartrami rapidly developed inthe northwest Pacific. Initially most ofthe participants were salmon driftgillnet boats after the close of their sea­son, but many squid boats soon joinedthem. The efficient new method soonbegan to threaten the livelihood of thesquid jigging boats and oppositionmounted. Jigging interests argued thatthey have a prior claim to and areeconomically dependent upon thefishery. Furthermore, they maintainthat drift gillnetting of squid is: 1) Tooefficient; 2) threatens recruitment bycatching spawning squid which are lowin value anyway; 3) causes waste asmuch dead squid is lost from the net;and 4) is often used as a cover for il­legal salmon fishing.

On 1 January 1979 the FisheriesAgency, a part of the Ministry of Ag­riculture, Forestry, and Fisheries, pro­hibited drift gillnet fishing for squidnorth of lat. 20 0 N and west of long.170 oE, and some squid jigging interestsare now appealing for a total ban on thefishery. However, over half the viola-

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tions within the restricted area havebeen by licensed squid jigging boatsand many others are participating. Thissituation has arisen partially becausemost squid jigging boats are operatingat a financial loss . The drift gillnet boatshave catch rates about ten times that ofthe jigging boats and considerablylower fuel consumption (Anonymous,1979a). However, drift gillnetting isapplicable to only certain species ofsquid.

Today the medium-scale jiggingboats concentrate on the offshore Sea ofJapan fishing grounds during spring andsummer and late in the season shift tothe Pacific to fish for O. bartrami.Some of the large-scale boats fish for T.pacificus in the northern part of the Seaof Japan, primarily within the Sovietzone, but their main fishing grounds arein the Pacific.

Winter is an idle period for most jig­ging boats in Japan's waters. To extendthe amount of time fishing during ayear, over half the large-scale and manyof the 90-100 ton boats fish squid in theSouthern Hemisphere between De­cember and May. During the 1979-80season about 269 of these boats were tofish near New Zealand and Australia:113 are licensed to fish in New Zealandwaters, and the remainder were to be

3

Fishing, sOl1ing, and drying squids. Photos courtesyof the Yamaha Fishery Journal.

involved in joint venture test fishing(Anonymous, 1979b). Other boatswere to fish off Equador and Mexico.

Access to foreign fishing grounds hastraditionally provided Japan's fishingindustry with both landings and ameans to reduce pressure on heavilyutilized domestic waters. Con­sequently, it has permitted a disregardfor management of the resource. How­ever, by reducing such access, the es­tablishment of 200-mile zones has en­couraged an emerging awarenessamong Japanese fishermen andfisheries administrators of the need forfisheries resource management.

4

Japan's squid fisheries are charac­terized by intensive fishing effort andthus by severe competition and margin­al economic efficiency in both thedomestic and international arenas. Inthe northwest Pacific, resource deple­tion, excessi ve competition, restric­tions on operations and winter inacti v­ity make a large number of Japan's95-500 ton jigging boats eager to gainaccess to other squid resources. Theround trip from Japan to Australia is 45days and that from Japan to Newfound­land is 90 days, yet Japanese boats stillseek access to these grounds. Some op­timistic boat-owners dream of being

able to jig off northeastern NorthAmerica between July and Decemberand off Argentina between January and

June. R I'egu abon

The squid jigging fishery was unreg­ulated until 1969 because the resourcewas abundant, but with decliningCPUE, competition among the largenumber of boats gradually became aproblem. In 1969 the large-scale, and 4years later the medium-scale, boatswere licensed by the Ministry of Ag­riculture and Forestry (it became theMinistry of Agriculture, Forestry, andFisheries in 1978). Thus boats over 30

Marille Fisheries Review

tons are regulated by the FisheriesAgency. In 1972, to reduce competi­tion and interference between the vari­ous classes of boats, waters adjacent toJapan, including most parts of the Seaof Japan, were closed to the large-scaleboats and jigging by medium-scaleboats was prohibited in certain coastalwaters.

The following year boats fishing inNew Zealand were licensed. Also in1973, as a conservation measure duringthe spawning season, jigging by boatsover 30 tons was prohibited in Japanduring March and April.

Since 1973 most boats between 5 or

July-A ugust 1980

to and 30 tons have come under theregulation of prefectural Sea AreaFisheries Adjustment Committees or ofthe respective prefectural governors;the jurisdiction of these entities encom­passes the coastal waters of the indi­vidual prefectures. Thus, in a patternfamiliar in Japan's fisheries, regula­tions gradually forced the larger boatsoffshore or overseas in order to reservethe coastal waters for the smaller boats.

Unlike the Regional Fisheries Coun­cils in the United States, Sea AreaFisheries Adjustment committees haveneither the political power nor the geo­graphic extent to enable them to be-

come an effective instrument offisheries resource management for mostfree-swimming species. Their mainpurpose is to arbitrate disputes concern­ing use of the fishing grounds. In otherwords, the function of these commit­tees, and, incidentally, that of theFisheries Agency as well, seems to be"fisheries management" rather than"fisheries resource management"(Keen2

).

'Keen, Elmer A. 1979. Fisheries resource man­agement - an assessment of the Fisheries Con­servation and Management Act of 1976. SanDiego State Univ., Dep. Geogr., San Diego. Un­publ manuscr., 19 p.

5

Equitable, unified management ofthe T. pacificus stock is difficult toachieve because, as the squid migratefar along Japan's coasts and through theoffshore waters of the Sea of Japan andthe waters of South Korea, NorthKorea, and the Soviet Union, politicaland geographic division of both domes­tic and international jurisdictionstrongly discourages if not precludesunified policy. Moreover, fishing sea­sons and the nature of the fishery varyfrom place to place.

Thus there is little incentive for re­source management on the part of theindividual prefectures because, whileits cost would be borne by the indi­vidual prefecture alone, its benefitswould be shared by all prefectures incommon. Similarly, although Japanmakes over 70 percent of the landingsof the species, resource managementincentive is diminished on the nationallevel as well.

Differences in the degree of depen­dence of the various boats upon thefishery and the wide range in their sizeand capabilities further complicate reg­ulation. Although fishing effort is ex­cessive, the lack of alternative fisheriesresources or other appropriateemployment, plus the intractable ques­tions of responsibility, cost, andequitability, challenge both the will andthe attempt to reduce it. Thus fishingeffort remains excessive, the resourceis in a critical state, and the majority ofthe boats operate at marginal or sub­marginal levels.

Government fisheries policy has em­phasized development and the mainte­nance of employment to the neglect ofresource management, and an exces­sive number of boats is one of the majorproblems of the fishery today. The be­lief that it does not matter how muchsquid is caught, because, as it has aI-year life cycle, it will die anyway, hasinfluenced this policy. Thus the avail­ability of low-interest governmentloans for investment in boats encour­aged increases in fishing effort. Thelicensing system was imposed onlyafter the number of boats had becomeexcessive, and the ability to transferlicenses makes it even more difficult toreduce their number. Furthermore, the

6

long experience as a "free" (unregu­lated) fishery persists in both regulationand practice. Thus, even after the de­cline in the resource had become evi­dent, there was little conceptual moti­vation to stem the increase in fishingeffort.

Associations representing themedium-scale and large-scale squidjigging boats have considerable politi­cal influence, and the sheer number ofsmall-scale boats makes them a strongvested interest. Furthermore, the largeamount of social and economic invest­ment in the squid jigging fisheries com­pounds this inertia. Thus even if thegovernment was resolved to reducefishing effort, it would be an extremelydifficult task. The Fisheries Agencythinks it advisable to reduce fishing ef­fort, but refuses to subsidize it, bothbecause great cost is involved and be­cause such support is no more justi­fiable in the case of the squid fisherythan it is in that of other fisheries suffer­ing from excessive concentrations offishing effort.

Severe restrictions establishing catchquotas, allowable gear, and fishingareas have forced reductions inJapanese fishing effort within theSoviet zone. The Soviet restrictionscause hardship to Japan's squid fleet,but are positive resource managementmeasures. However, such policy ispossible because it is imposed by anexternal entity which bears no respon­sibility to the affected fishermen andbecause, although the regulating au­thority owns the resource, it deriveslittle benefit from the regulated fishery.

Consumption

After 1960, new processingtechniques and the development of fro­zen seafood distribution chains stimu­lated the demand for squid and facili­tated both wider product lines and newmarkets. Since 1973, increasing rela­tive price has resulted in a 15 percentdecrease in urban consumption ofsquid, but it is still higher than that ofany other species. In 1977 per capitaconsumption of squid was roughly 4.65kg (10.23 pounds) (round weight equi­valent).

About 40 percent of the landings aremarketed fresh or frozen, and"sashimi," finely-sliced uncookedsquid eaten lightly dipped in soy sauceflavored with "wasabi" (Japanesehorseradish), and "sushi," uncookedsquid on bite-sized portions ofvinegared-rice, are very popular itemswhich constitute a major part of thisdemand. Fresh and frozen squid is oftenpurchased for home consumption invarious fried, roasted, broiled, un­cooked, sauteed, and dressed forms.

A Japanese meal usually consists ofnumerous different dishes served sothat each person at the table partakes ofeach dish in the amount and order thathe or she wishes. Consequently, thereis a demand for a wide variety of itemswhich can be marketed in very smallquantities and can be served either assold or with little additional prepara­tion. Many processed products meetthis criterion and are frequently sold inpacks as small as 50-100 g (1.8-3.5ounces). In the past 10 years thenumber of processed squid products hasincreased greatly. Imported squid isused to produce many of these andsome sources claim that such productsare partially intended to "camouflage"the taste of the unfamiliar species.

Several products in addition to thosealready mentioned include: ika­moromi, squid pickled in miso, yeast,and rice or wheat; ika-mirin, squidpickled with red pepper and soy sauce;yaki-ika, roasted squid; ni-ika, boiledsquid; koji-ika, fermented squid; Ko­rean style shiokara, salt-fermentedsquid with ground hot-peppers; un­cooked squid with herring or sea urchinroe; diced, boiled squid with kelp; ika­tsukudani, various boiled, soy sauce­flavored items; smoked squid; lemonflavored squid; ika-kamaboko andnumerous other products made fromsquid-based fish-paste and other ingre­dients. Minor amounts of total landingsare canned, salted, and smoked, and in1977 about 14,000 tons was marketedas shiokara, salt-fermented squid.These are but a selection of the majorproducts available, and there are manyvariations on, and combinations of,these items.

Almost 50 percent of total landings

Marine Fisheries Review

are processed into a wide variety ofdried and flavored forms. Surume

• (dried-squid) is produced by slitting themantle, removing the organs and dry­ing the mantle and tenacles either ar­tifically or naturally. it is widely usedfor ceremonial purposes such as wed­dings and shinto festivals and as a rawmaterial for further processing. Lightlyroasted, manually torn into thin stripsand served with a mayonnaise-soysauce dip, it is hard and chewy like beefjerky and is often eaten with alcoholicbeverages.

Saki-ika, which was developed inabout 1960 to utilize the abundance ofsqu id then available, is essentially afurther processed version of surume.To produce it, squid is boiled to removethe skin and is then roasted, mechani­cally torn into thin strips, flavored, andsold ready-to-eat in plastic bags.Numerous variations on this productare available and have become verypopular. In addition to being an accom­paniment to alcoholic beverages, theseproducts are widely used as general

• party foods and snack items, and muchof their success lies in the conveniencewith which they can be marketed andconsumed.

The Japanese have the highest percapita consumption of seafood in theworld and a long tradition as a fish­eating people. Thus their fish handling,processing, and consumption patternsare highly refined and the averageJapanese is aware of and insists upondegrees of difference in taste which theconsumer in the United States does noteven seem to recognize. Hence, theJapanese market has very sensitivecolor, flavor, and quality requirements.Furthermore, the Japanese arehabituated to the flavor of local species.Squid is considered most deliciousfresh and uncooked and is prefen'edserved in this manner. Consequently,fresh T. pacificus and Loligo spp. bringthe choice squ id prices.

In m id- Septem ber 1979, fresh,high-quality squid sold on thewholesale Tokyo market for $5.00 perkg ($2.27 per pound). However, forseveral reasons United States or otherforeign suppliers would receive a con­siderably lower price. Imported squid is

July-August 1980

neither fresh nor does it have the mostpreferred taste. Thus most of it ispurchased as raw material for process­ing and therefore brings a relatively lowprice. Additionally, squid caught bytrawl is slightly misshapen and belowstandard quality, and it often sells at 20to 25 percent less than those caught byjigging. Depending on the species andother mentioned factors, the price maybe further discounted. The tax on fro­zen squid is 15 percent, shipment fromthe West Coast costs $0.27 per kg($0.12 per pound) and insurance, cus­toms clearance, and middlemen addfurther costs.

Two examples may help to explainJapan's market. In Newfoundland inI978,lllex squid, much of which was tobe exported to Japan, sold for $0.176per kg ($0.08 per pound) at the dockand $0.44 per kg ($0.20 per pound) topackers. The same squid later brought$1.27 per kg ($0.58 per pound) on thewholesale market in Japan. Consider­able amounts of squid purchased inArgentina sold in Japan in the autumnof J979 at a 29 percent discount for$1.12 per kg ($0.51 per pound).

The quality of the fresh and frozenproduct depends on careful handlingfrom the moment the squid is caughtuntil it is sold to the final consumer, andthe Japanese market is far more de­manding and rigorous than that of theUnited States. It took 3 years ofnegoti­ation, expensive mistakes, and mutualeffort to establish effective squid han­dling practices in the export of Cana­dian Illex to Japan. Much training ofand dfort by U.S. fishermen and fishhandlers will be required in order tomeet the exacting Japanese standards.However, numerous trading, proces­sing, and fish marketing companies,often working in combination, providefinancial, technical, and supervisoryassistance to a wide range of squidfisheries activities in other countries.Such efforts to insure a dependablesupply of quality squid for Japan canprovide markets, increase local prices,and stimulate fisheries development.

Certain sizes of squid are desirable,and shipments must be of similar-sizedsquid. Mixing of different sizes orslight deviations from the desired size

lowers value, especially when sellingon the fresh and frozen market. Fur­thermore, color, mantle-thickness, anddegree of freshness determine valueand potential use, thus both the type ofsquid and the stage of life when caughtare important. High temperaturerapidly spoils squid and rain discolorsit, thus weather conditions at the time ofharvest affect the yuality and con­sequently the value of landings.

Differences between species tradi­tionally landed in Jdpan and thosedomestic and foreign species whichhave recently come into prominencehave forced changes in processing andconsumption. Texture, flavor, size, andstructure determine the potential uses ofsquid on both the fresh and processedmarkets. In the case of processing, ittook expensive, major adjustments intechnique and equipment to adapt saki­ika processing plants for the utilizationofO. bartrami, and now that the transi­tion has been effectively made, a largesegment of the processor's market isdependent upon O. bartramt for rawmaterial.

Similarly, horizontal alignment ofmantle fiber is essential for such pro­cessing, but the Illex squid has verticalstructure. Illex is also unsuitable forthis type of processing because it doesnot yield the soft, fibrous texture andappearance which is required of theproduct. Nototodarus sloani gouldifrom Australia has confronted market­ing problems because of its large size,short tenacles, and poor yield whenprocessed. Some 0f the Argentine Jl/exlanded to date has been inferior becauseit was spawning or had spawned

Squid consumption increases mark­edly in December and January in con­junction with Japan's protracted NewYear's celebrations. Demand forsurume is high at this time because of itstraditional and ceremonial uses and,along with saki-ika and other items,because of the many parties and gather­ings which occur during this festiveperiod. Most of Japan's domestic land­ings are made between July andNovember and the amounts fluctuatewidely between and within seasons andamong the various species landed.Therefore, foreign suppliers must be

7

aware of the state and season of Japan'sdomestic market.

A distinctive feature of Japan's squidmarket is its ability to utilize both vari­ous kinds of squid and squid of differentdegrees of quality to produce a widerange of products. This enables suc­cessful use of several different sourcesof supply which yield both a variety ofspecies and inconsistent quality. Thehighest quality product is sold on theretail or specialty market and a widerange of lower quality squid is pro­cessed. The very high unit price of oneportion of a shipment enables the use ofresidual, low-quality squid for the pro­duction of low-value items. This helpsexplain why some imported squid sellsat or below cost. However, the qualityproduct usually brings a price sufficientto compensate for the extra handlingcosts involved.

Import Quota System

Squid imports were banned until1970 because Japan's squid fisheriessatisfied domestic demand until land­ings began to decline drastically after1968. In 1971 a squid import quotasystem was established to permit lim­ited imports. It protects domesticfishermen from foreign competition byregulating total squid supply in order tomaintain a high market price.

Imported squid is classified into twocategories and nine subcategories asfollows: "Raw squid," which includes1) live, 2) fresh, 3) frozen, 4) chilled,5) salted, and 6) brine-soaked; and"dried-squid" which includes7) dried, 8) smoked, and 9) preparedor preserved squid (canned, boiled,seasoned, salt-fermented, and prepara­tions). Items 8 and 9 may be importedfreely and import quotas have been es­tablished for items I through 7(JETRO, 1979).

There are three categories of quotas,one each for processors, trading com­panies, and fisheries development.Their relative proportions vary eachyear and in 1979 were approximately70,25, and 5 percent, respectively. Al­though initially the quota was only fortrading companies, the governmentlater designated a quota specifically for

8

processors in order to give them somecontrol over supply and thus to precludetheir domination by the trading com­panies. Thus the government controlsboth the amount and distribution ofsquid imports, and, to protect the busi­ness interests of those who deal insquid, it does not publicly disclose thisinformation.

Altogether, 210 companies hold im­port quotas, sometimes as little as 10tons apiece. However, major tradingand fishing companies and theiraffiliates hold large blocks. As importsare limited, an import quota has value.Quota holders may realize this valuethrough either control of that much ofthe market, sale (at about 5 percent ofthe sale price in Japan), or other trans­fer.

The Ministry of International Tradeand Industry (MIT!) administers thequota system and has the difficult andpolitically onerous task of establishingthe amount of the quota. It attemptsboth to insure that the total supply willbe sufficiently shy of demand to main­tain a high value for domestic squid andsimultaneously to recognize the in­terests of other participants in the mar­ket. The quota is set twice each year onthe basis of estimated landings and maybe adjusted subsequently as conditionswarrant. The Trade Department of theFisheries Agency's Marketing Divisionhandles that proportion of the quotadesignated for processors and distri­butes it among their four nationalcooperative associations: One each forprocessors of dried-squid, delicacyfoods, pre-cooked foods, and generalfisheries products.

In administering the import quotasystem, the government weighs protec­tion of the fishermen more heavily thanthe interests of the consumer. Forexample, in fiscal !978, the estimatedtotal domestic supply of squid, includ­ing the landings of Japanese-flag boatswhich fished overseas, was subtractedfrom estimated demand for the year andthe impOJ1 quota was set at less than 60percent of the remainder (JETRO,1979). Thus the planned deficiency insupply exceeded 40,000 tons, causedhigh domestic prices, and resulted in adecrease in squid consumption.

The United States and other coun­tries on the one hand and processors andother groups in Japan on the other havebeen encouraging the Japanese Gov­ernment to increase import quotas andto otherwise relax restrictions on squidimports. However, Japanese societytraditionally protects established in­terests and the party in power derivespolitical strength from a system of dis­proportionate representation in whichthe electorate in rural areas, includingthe fishing communities, plays an im­portant part. Thus, although fishermenform but a small portion of the elector­ate, the present government is commit­ted to protecting them and thus is reluc­tant to increase the quota enough tomeet domestic demand. Hence, the im­port quota system supports a Japanesestyle modus vivendi whereby fisher­men, processors, trading companies,and government administrators eachparticipate in a regulated market. Theconsumer pays for the system and itsadministration through inflated squidprices and through taxes. Another fac­tor in Japan which contributes to thehigh cost of squid and to the difficultyof changing the situation is the long,intricate network of middlemen be- •tween producer and consumer. At­tempts to shorten and simplify distribu­tion channels are meeting with limitedsuccess, but the impediments outlinedabove apply in this case as well.

Japan's import quota for squid hasbeen increased for fi ve reasons: 1) TheT. pacificus stock has not recovered;2) access to foreign squid resources hasbeen restricted; 3) Japanese participa­tion in joint venture squid fisheriesoverseas has increased; 4) the govern­ment favorably considers import quotarequests from ventures involvingJapanese boats; and 5) both foreign anddomestic groups have been stronglypressuring the government to makesuch increases. However, the amountof the import quota is tied to domesticlandings, and if landings increasesufficiently in the future, reductions inthe quota could result.

In 1977, Japan's small import quotafor dried squid was not all utilized, andtherefore the amount was not increasedthe following year. The Fisheries

Marine Fisheries Review

Agency's Trade Division reportedlywould increase the quota and proces­

- sors would purchase a competitivelypriced product if it were available.

Korea, Thailand, and Argentina andother countries export various driedsquid products to Japan. Althoughdried squid produced in Newfoundlandis exported to expanding markets inHong Kong and Taiwan, exports toJapan have been limited, and in 1979the poor dried-squid market in Japanfoiled attempts to increase sales to Ja­pan. However, various companies inNewfoundland are producing or plan­ning to produce for the Japanese mar­ket, and several people on the U.S. EastCoast are considering similar enter­prises.

In 1978 , Japan imported 118,000tons of frozen and 4,000 tons of pro­cessed squid and cuttlefish. (Figures forthe two items are frequently recordedtogether, thus individual values cannotreadily be determined.) However, I es­timate that about 80 percent of thisamount is squid. The major exporters offrozen squid were Korea, Canada,Spain, Taiwan, and Argentina. UnitedStates squid exports to Japan totaled

- 1,909 tons and were almost exclusivelyfrozen Loligo opalescens (Berry) fromCalifornia. The United States rankedtenth among over 30 suppliers. Inciden­tally, in 1978, Japan caught 42 percentof the squid caught by foreign fisher­men in the U.S. 200-mile zone, and 85percent or 6,053 tons of Japan's catchoff the U.S. East Coast was squid.Japan exported minor amounts of squidand squid products to the United States,mostly to supply ethnic markets inHawaii and California.

July-August 1980

Conclusion

Japan's international demand forsquid is high and continues to grow,and traditional consumption patternssuggest that it might rise even further ifsome of the artificial price supportmechanisms were removed. However,the combination of establishedsuppliers, squid fisheries developmentby several nations which intend to ex­port squid to Japan, and Japan's in­creasing overseas participation in jointventure squid fisheries make competi­tion severe. Thus the extent and natureof international competition stronglyrecommend that development of aU.S.squid fishing industry should includethe establishment of a domestic marketto complement exports to Japan. If suc­cessful, this could insure sound de­velopment and future expansion ofU.S. squid fisheries by providing ac­cessi ble markets.

The preceding pages merely outlineJapan's squid fishing industry, butplans to develop U.S. squid fisherieswould benefit from detailed study ofcertain of its aspects. Several itemsmight include: 1) Analysis of the ad­vantages, disadvantages, and relativecosts of each fishing method; 2) inves­tigation of specific markets and market­ing strategies for particular species ofU.S. squid; and 3) evaluation ofpossi­ble U.S. -Japan cooperative arrange­ments to develop the U.S. industry.

Joint enterprises with Japan mightoffer access to Japan's market and in­sure the cooperation of the JapaneseGovernment; these two points are ofparamount importance. Additionally,study ofJapanese products and process-

ing techniques might suggest ways tostimulate domestic demand in theUnited States.

Thus Japan's squid market offers anincentive to develop the U.S. squidfishing industry. Furthermore, overhalf of U.S. fisheries exports go toJapan and 88 percent of these are high­value items, but expansion of U.S. ex­ports and, consequently, of the U.S.fishing industry depends upon exploita­tion of the underutilized species. Thus,attempts to export squid to Japan couldyield valuable experience in marketinglower-value, underu tilized species onour largest export market. This couldlater facilitate similar efforts with otheravailable fisheries resources.

Acknowledgments

I am deeply grateful to many peoplein all aspects of Japan's fishing industryfor their assistance and explanations: toJames Johnson, U.S. Embassy, Tokyo;Susumu Kato, NMFS TiburonLaboratory; Elmer Keen, San DiegoState University; and others for assis­tance, direction, and encouragement,and to the Japanese Ministry of Educa­tion for funding my research.

Literature CitedAnonymous. 1979a. Kiro ni tatsu ika nagashi­

ami no 'shikaku·. (The drift-gill net fishery forsquid: Can it continue?) Suisan Keizai, 7830,p. 3.

1979b. Osutoraria shiso kyoka.(Permission to test fish in Australia.) SuisanKeizai, 7852, p. I.

JETRO (Japan External Trade Organization).1979. Frozen squid and cuttlefish. Access toJapan's import market, No.8, 17 p. JETRO,2-5, Toranomon 2-chome, Minato-ku, Tokyo197.

Rodgers, H. E. (Editor). 1979. Squid outlook:Tasmania 1979-80. Tasmanian Fish. Dev. Au­thority. Hobart, 60 p.

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