Economic evaluation of new coastal fishery entrants: A case study of Miyazaki prefecture, Japan

Abstract

A significant decrease in the number of fishery workers is becoming a problem in Japan. For new entrants to become established in the region, they must be profitable as fishing businesses. Using the case of Miyazaki prefecture in Japan, this study identifies the economic conditions required to make longline fishing and bottom gillnet fishing profitable by applying the net present value (NPV) method. When operating on 200 days, which is the guideline for new entrants in longline fishing, if the value of investment is less than 44.1% of the minimum required, the investment will not provide positive returns. However, the study also finds that new entrants using both longline and bottom gillnet fishing can easily generate the revenue required to cover investments and can, therefore, be profitable. For 226 operating days, which is the guideline for new entrants in longline and bottom gillnet fishing, investment will offer positive returns when it exceeds ¥ 5.698 million. Moreover, increasing the number of operating days by 13.3% to 256 raises the return on investment by 14.0%. Therefore, the value of investment is proportional to an increase in operating days.