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  • P-ISSN 1738-656X
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한국개발연구. Vol. 12, No. 1, May 1990, pp. 93-110

https://doi.org/10.23895/kdijep.1990.12.1.93

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Regulatory Reform Proposals for the Korean Deep Sea Fishing Industry (Written in Korean)

김종석

Author & Article History

Manuscript .

Abstract

The basic purpose behind the Korean government's policy toward the Korean deep sea fishing industry is to limit growth of the industry. Therefore, the regulations on the industry are generally restrictive and interventionist. The policy is intended to maintain high domestic fish prices in order to protect the domestic coastal fishing industry. Some regulations have also been introduced to maintain “industrial order” Each fishing vessel must obtain a government permit for operation. The permit specifies the kind of fish it can catch、the area of sea m which it can operate, and the port at which it can unload its catches. The number of permits government issues each year is based on the estimates of the demand increase calculated by government official, and the government traditionally has been fairly conservative in its estimation、reflecting its concern for fish price stabilization, which actually implies a gradual increase of the prices. There is also a restriction on importing vessels from abroad. This regulation is intended to protect the domestic shipbuilding industry. However, this regulation has resulted in an unusually high average age of Korean fishing vessels, causing fishing costs to rise. These regulations and the inflexible response of the regulators to changing circumstances have resulted in many problems: 1) High domestic fish prices, which are, to some extent deliberately, inflated to three or four times the level of international prices, resulting in huge consumer welfare losses: 2) over-exploitation of coastal fish resources; 3) provision of a hospitable environment for inefficient firms to survive, which is especially evident from the fact that, despite the high fish prices in Korea, most of the firms in the industry do not enjoy high profitability. It also must be pointed out that the actual beneficiaries of the high fish prices are the large operators, who are protected from competition and provide most of the fish for domestic consumption, rather than the low-income fishing households and small costal operators whom the policy was originally designed to help. This study proposes a set of regulatory reforms and policy changes which could promote competition and equity within the industry and allow firms to reduce costs and increase productivity. Such changes can make the industry more efficient and interna­tionally competitive. Major proposals are, among others: minimization of bureaucratic discretion in issuing fishing permits and maintaining transparency in the governments' decision-making processes; reduction of the government permit specifications and simplification of the operational categories within the industry; and removal of the restrictions on importing foreign fishing vessels.

JEL Code

L51, L70

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