Appendices

Appendix 2

Socioeconomics of Freshwater Fish Farming in Asia¹

Madan Mohan Dey
Senior Scientist/Project Leader, WorldFish Center, P.O. Box 500 GPO, 10670 Penang, Malaysia.

Mohammed A Rab
Project Scientist, WorldFish Center, P.O. Box 500 GPO, 10670, Penang, Malaysia.

Ferdinand J. Paraguas
Assistant Scientist, WorldFish Center, P.O. Box 500 GPO, 10670 Penang, Malaysia.

Somying Piumsombun
Senior Adviser, Department of Fisheries, Ministry of Agriculture and Cooperative, Kasetsart University Campus, Bangkok 10900, Thailand

Ramachandra Bhatta
Professor and Department Head, Department of Fisheries Economics, College of Fisheries, University of Agricultural Sciences, Mangalore, Karnataka, 575 002, India

Ferdous Md. Alam
Researcher, WorldFish Center-Bangladesh Office, House No 22-B, Road No. 7, Banani, Dhaka 1213, Bangladesh

Sonny Koeshendrajana
Research Coordinator, Research Center for Marine and Fisheries, Product Processing and Socio Economic (RCMFPPSE), Ministry of Marine Affairs and Fisheries, Jl. RM. Harsono No . 8 Ragunan, Jakarta Selatan, Indonesia

Mahfuzuddin Ahmed
Principal Scientist/Program Leader, WorldFish Center, P.O. Box 500 GPO, 10670 Penang, Malaysia.

Abstract

This paper reviews different freshwater aquaculture technologies and provides a comparative analysis of the profile of freshwater fish farmers and their farming systems, and costs, returns and productivity of freshwater fish production in Bangladesh, China, India, Indonesia, the Philippines, Thailand and Vietnam. The analysis was based on secondary information and on field survey data collected by the WorldFish Center and its partner research institutes. Productivity, cost of production and profitability vary widely among different aquaculture technologies within and among developing and developed countries. These differences are mainly due to technology, species, production environments and resource endowments, input costs, culture practices and selected farming systems. In general, productivity, cost of production and profitability increased in tandem with the level of intensity in Bangladesh, China, India, Indonesia, Philippines, Thailand and Vietnam. Feed cost accounts for about 50% of the total cost of production. Analysis of the share of output accruing to production factors showed that a high percentage of gross value of production in most freshwater technologies in Bangladesh, India and Vietnam is considered as residual or "pure profit". This is due to a substantial amount of feed coming from 'own-produced' in these countries, so that this can be considered as family income together with family labor. Analysis on determinants to yield for carp production showed that feed application in Bangladesh, India and Vietnam exhibits diminishing returns to yield, implying that increasing feed application increases yield up to a certain point only. The analysis of the determinants of feed used revealed that in general, stocking density, nitrogen application and price of feed influence the level of feed application.

Keywords: Asia, freshwater aquaculture technology, factor share, cost and returns

1. Introduction

Aquaculture has developed in freshwater environments, mainly in Asia, over the last two decades (FAO 2000). Freshwater aquaculture in Asia contributed about 47% of the total Asian aquaculture production (including brackish and freshwater) in 2000 (FAO 2002). Countries in the region are endowed with inland water bodies, and numerous fish species, these countrieshave enormous potential for contributing to food security, nutrition, employment generation, and rural poverty alleviation. Recognizing these positive elements, governments in the region, international development agencies, and research institutes have given high priority to aquaculture development in their short- and medium-term plans. In order to have a broad policy perspective for sustainable and equitable development of freshwater aquaculture industry in the region, it is important to document freshwater aquaculture technologies and socioeconomic profiles of the freshwater fish farmers in the region.

This report reviews and provides a comparative analysis of freshwater aquaculture technologies and profiles of freshwater fish farmers and their farming practices, costs, returns, as well as the productivity of fish production in Bangladesh, China, India, Indonesia, the Philippines, Thailand and Vietnam². The analysis is based on secondary information and on field survey data collected by the WorldFish Center and its partner research institutes. The first section presents a general overview of the importance of freshwater aquaculture in the region and its production environments. Section 2 describes freshwater aquaculture technologies of the seven countries and section 3 provides a short description of the socioeconomic profile of freshwater fish farmers. Section 4 presents an economic analysis of the major freshwater fish farming technologies. Section 5 investigates the extent and type of feed use and its effect on yield. This section also addresses the determinants of feed application level. In view of the growing international trade of tilapia, section 6 investigates the competitiveness and comparative advantage of tilapia farming in Asia. A summary of the results and conclusions is provided in section 7.

2. Freshwater Aquaculture in Asia: An Overview

China is the leading producer in freshwater aquaculture in Asia and in the world. It alone provides 78% of the total Asian freshwater aquaculture production and 74% of the world total. Other Asian major producing countries of freshwater aquaculture are India, Bangladesh, Vietnam, Indonesia, Thailand and the Philippines. Asia in general provides about 94% of the world's total freshwater aquaculture production. Over the last decade freshwater aquaculture production in these countries and in Asia generally has increased rapidly³. Vietnam achieved the highest growth rate (15%), followed by China (14%), Bangladesh (13%), and Thailand (9%) (Table1). This increase in freshwater fish production is mainly attributable to expansion in production areas and improvements in yield, associated with the intensification of aquaculture practices.

2.1. Freshwater production environments: utilization and potential

Freshwater production environments include ponds, ditches, cages, net enclosures and pens in reservoirs, lakes, rivers and channels, and paddy fields. Table 2 presents different freshwater fish production and culture areas in the selected countries of the region. In general, pond aquaculture is the most popular in terms of area, quantity and number of farmers in most of the countries under study. Production from pond aquaculture ranges between 59% (Indonesia⁴) and 81% (Bangladesh) of the total freshwater production in these countries.

Productivity of ponds in China is around 4 440 kg.ha-1 followed by brooks (1 623 kg.ha^-1), lakes (921 kg.ha^-1) and reservoirs (743 kg.ha^-1) (Huang and Li 2001). Paddy fish culture, which has been discouraged recently (Cen and Zhang 1998), has achieved the highest increase in production (42% annually), followed by reservoirs (14%), lakes (12%), and ponds (10%). In general, total freshwater area and production increased at an annual rate of 3.17% and 11.80% respectively during 1981-97.

In Bangladesh, there were about 1.3 million ponds covering 3.5% of the total area of inland waters during 1992-93; these contributed 26% of the total inland fish production (Alam 2001). The percentage of ponds under culture increased from 27% in 1984-85 to 52% in 1995-96, contributing about 31% of the total inland fish production. Likewise, aquaculture production increased 8.18% per annum during the period 1986 - 1996. The productivity of freshwater ponds in Bangladesh is 1 400 kg.ha^-1

In Vietnam, ponds and small lakes account for only 10% of the total production area, but the yield is relatively high compared to other production environments in the country, and they contribute 60% of total aquaculture production (Lovatelli 1997). In the year 1998, there were about 16 000 freshwater cages of which 12 000 were located in rivers (MOFI 1999).

It is interesting to note that the biophysical potential for growth in aquaculture is still far from exhausted. Among China's 33.33 mil ha of paddy fields, only 1.5 mil ha have been used for fishery purposes. The three mil ha of saline areas and lowlands suitable for fishery purposes are barely developed (Huang et al. 2001; Zhao 1998). In Bangladesh, pond utilization statistics show that a high proportion of pond owners are not currently practicing aquaculture (managed fish culture) in their ponds. Only about 52% of the total ponds are stocked with fingerlings and with limited inputs. Around 31% have potential for fish culture without improvement and 17% are derelict pondsnot suitable for fish culture without improvements⁵. There is vast potential for the poorest members of the society in the country to become new entrants in aquaculture (FAO 2000).

In India, even after decades of rapid growth in aquaculture, only 10% of its potential has been exploited (Bhatta 2001). In addition, production potentials of reservoirs which currently produce 5 - 10 kg.ha-1 could be expanded through scientific management (Upare 1999). In Indonesia, only 28% of the potential area for freshwater aquaculture development had been exploited by 2000 (Ismayanti 2001). There is vast potential for freshwater aquaculture production in the country from irrigation systems (about 4 million ha), and from about 1% of the 14 mil ha open water area, which consists of lakes, reservoirs, rivers and swamp (Dey et al. 2001; Kontara and Maswardi 1999). In Vietnam, only 38% of the total freshwater area was utilized in 2000. The country is also endowed with 580 000 ha of low-lying areas and floodplains suitable for aquaculture. Less than 10% has been utilized, with the potential to produce about 27 000 t of fish (Luu 1999).

2.2.Freshwater Fish Species

China has 800 freshwater fish species of which over 40 are cultured (Cen and Zhang, 1998). Chinese carps namely, silver carp (Hypopthalmichthys molitrix), grass carp (Ctenopharynggodon idella), and common carp (Cyprinus carpio) dominate freshwater aquaculture. These species account for 60% of the total freshwater aquaculture in China and 50% of the total freshwater aquaculture in Asia. Bighead carp (Aristichthys nobilis) and crucian carp (Carassius auratus) are the other two dominant species in China that have economic importance in the country (ICLARM 2001; Huang et al. 2001). Over the last decade, Chinese river crab, a high-value freshwater fish species, achieved the highest annual growth rate (40%) in the country, followed by crucian carp and Nile tilapia with an annual growth rate of 20% each (FAO 2002). It is worth noting that production of other high-value freshwater species such as mandarin fish, freshwater giant shrimp, and soft-shelled turtle also increased substantially in 2000 (Shuping 2002).

Unlike China, Indian major carps namely rohu (Labeo rohita), catla (Catla catla), and mrigal (Cirrihinus mrigala) dominate freshwater aquaculture in India and in the entire Indian sub-continent. The three Indian major carps accounted for about 87% of total freshwater aquaculture production in India during 2000 (FAO 2002). Dominance of carp is such that freshwater aquaculture in India is almost synonymous with carp culture, and India is described as 'carp-country' (Jayarama 1998; Anon 1992). Other species include silver carp, grass carps, common carp, kalbasu, etc. Mrigal achieved the highest growth rate (13%) over the last decade (FAO 2002).

The Indian major carps also dominate freshwater aquaculture in Bangladesh. The Indian major carps together with silver carp account for more than 78% of total pond production in the country (FAO 2002). Other species include grass carp and common carp. Carps are the most important species in freshwater aquaculture, accounting for 88% of total freshwater aquaculture production. Other than carps, the inland freshwaters of Bangladesh are inhabited by 60 native and 13 exotic species of fish and 20 species of shrimp of which the majority are available in impounded water bodies.

Common carp is the dominant freshwater species in Indonesia accounting for almost 40% of total freshwater aquaculture production in 2000 (FAO 2002). Indonesia is the world's third largest producer of common carp after China and the USSR. Other freshwater species in Indonesia are tilapia, Nile carp, and Java barb. River eel is an emerging freshwater culture species, with a remarkable production growth rate of 45% over the last decade (FAO 2002).

In the Philippines, tilapia is the major freshwater cultured species accounting for 63% of total freshwater aquaculture production in the country. Although statistics show that milkfish (Chanos chanos) and carps are available, milkfish is not widely cultured in freshwater environments. Production of milkfish in freshwater environments is decreasing at an average annual rate of 2%. Carps, on the other hand, are considered newcomers in the Philippines. As production is of limited volume, production statistics of carp species have been lumped together with other species, andonly recently has the country started to keep track of the production performance of carp species. Although the production of carp is not even 1% that of tilapia, it expanded at an average annual growth rate of 55 % during 1993-1997 (Olalo 2000; Dey et al. 2001)⁶. It is thought that carp has tremendous potential for culture in the Philippines.

Nile tilapia, catfish and Thai silver barb are the most popular freshwater species in Thailand contributing around 38%, 27% and 16% respectively of total freshwater aquaculture production in 2000 (FAO 2002). These species have also expanded steadily over the other species at the rate of 17%, 11% and 16% respectively (FAO 2002). In addition, production of common carp has increased at an average annual rate of 15%.

A variety of freshwater organisms has been cultured in Vietnam. However, the information on species-specific production is scanty. In most cases only a qualitative indication is provided on the level of culture for each species (Lovatelli 1997). ICLARM (1998; 2001) reported that carps (common carp, silver carp, grass carp and bighead, rohu and catla), contributed 29% of fish production in 1996 in the country. Other important freshwater species are tilapia, catfish and Thai silver barb.

2.3. Freshwater Technology Profile

Freshwater aquaculture technologies and culture systems in the region are highly diverse (by country and economic importance) and consist of a broad spectrum of systems. Pond is the most popular environment and culture system in the region, in terms of production area, share in total production, and number of operators. Appendix Table 1 summarizes the key freshwater aquaculture technologies in these countries.

Polyculture of major Indian and Chinese major carps and exotic species in ponds is the most dominant aquaculture method in Bangladesh⁷. Most of the ponds are under subsistence/traditional and improved-extensive method of farming. Mazid 1999 reported that around 73% of rural households are involved in this type of culture system. There is also some monoculture of Thai pangus and catfish in ponds. Other methods include cage culture of tilapia and Thai pangus; integrated rice-fish culture of mirror carp, silver barb and culture-based oxbow lakes where grass carp, common carp, silver carp, and catla are stocked along with other species.

The Department of Fisheries (DOF), the leading fisheries extension agency in the country identified 23 aquaculture technology packages, which are being disseminated at the farm level through development of entrepreneurs. The Bangladesh Fisheries Research Institute (BFRI), entrusted to undertake research, has developed 24 technology packages for dissemination. Several NGOs in the country are also doing research on alternative technology packages focusing on poverty alleviation such as CAGES (Cage Aquaculture for Greater Economic Security)⁸. This small-scale cage culture produces a range of freshwater species (e.g. tilapia, Chinese carps, catfish, silver barb and the freshwater prawn (Macrobrachium rosenbergii), etc) that provides food for home consumption as well as income (Hambrey et al. 2001; Brugere et al. 2000).

Pond-based integrated fish farming used to be the most famous traditional aquaculture system in China. This system is still practiced, although with changes in area distribution, resulting from the development of the aquaculture industry and changing socioeconomic environments. Meanwhile, new aquaculture systems and practices have been developed and introduced for adoption under different aquaculture environments. Presently, the most popular freshwater aquaculture technologies in the country are the polyculture of carp (Chinese carp) in ponds and the monoculture of tilapia in ponds and cages. The monoculture of carp, intensive culture in cages, ponds and running water systems, is becoming popular. In general, compared to other countries in the region, culture of fish in China is characterized by semi-intensive, intensive and hyper-intensive methods (ICLARM 2001; Dey et al. 2001).

Composite fish culture (CFC), a distinct polyculture method of Indian major carps, Chinese and/or exotic carps together, is the major freshwater aquaculture technology in India⁹ (Jayarama 1998; Anon 1992). However, due to low market prices for exotic Chinese carps, farmers in India are shifting towards two- to three-species polyculture of Indian carps (Jayarama 1998). Currently, CFC has been practiced in different combinations of input such as fertiliser,fertiliser and feed,wastewater, aquatic weeds, or integrated fish-livestock farming. Among other technologies, mono- and polyculture of air-breathing fishes, mono- and polyculture of freshwater prawns, cage culture, pen culture, running water fish culture and pearl culture are important. Other fish species and species combinations adopted for freshwater aquaculture technologies are Labeo bata and C. reba in sewage fed systems, Ctenopharyngodon idella (grass carp more than 50%) in weed-based systems, and medium and minor carps, e.g. Labeo calbasu, L. gonius, L. bata, Puntius pulchellus, P. sarana and Cirrhinus cirrhosa in paddy-cum-fish culture. Another emerging technology in India is the 'flow through aquaculture system' (FTACS)¹⁰, which may be the beginning of a shift to industrial aquaculture using canal water. The technology using cement tanks is suitable in areas where water supply is abundant. In general, freshwater aquaculture in India is characterized by both extensive and intensive application of inputs.

In Indonesia, the most important freshwater aquaculture technologies are the running water system (RWS) in ponds, floating net cage aquaculture (FNCA), and culture of fish in paddy fields. The FNCA system has two packages: single floating cage system (FCS) and double floating cage system. Most of these technologies are for monoculture of either tilapia or common carp. There is some polyculture of tilapia, common carp, gourami, catfish and river ells. The RWS is used either in semi-intensive or intensive culture, while rice-fish farming is extensive (ICLARM 2001; Kontara & Maswardi 1999).

Freshwater aquaculture technology in the Philippines consists mostly of semi-intensive to intensive monoculture of tilapia, milkfish and catfish in cages, ponds, pens and tanks. Monoculture of tilapia in cages is the most common freshwater aquaculture technology in the country. Freshwater pen culture is dominated by milkfish. Other technologies include, monoculture and polyculture of carps in ponds, and monoculture of tilapia and catfish in ponds and in tanks.

The culture system in Thailand varies by intensity of input use and stocking density. Adoption of techniques such as monoculture, polyculture or integrated fish culture depends on the species chosen. Omnivorous species like tilapia, silver barb, common carp, Chinese carp and mrigal are stocked in ponds, using a polyculture system, while carnivorous species like walking catfish, snake-head, freshwater prawn and sand goby are the species generally chosen for monoculture techniques (ICLARM 2001; Dey et al. 2001).

A small-scale integrated farming system known as VAC which combines three different farming components - a vegetable or fruit garden (Vuon), fish/shrimp pond (Ao) and livestock pen (pen Chuong), is the most popular freshwater technology in Vietnam, especially in the Northern and in the Mekong Delta region¹¹. Also in the Mekong Delta, extensive culture of fish and prawn in rice fields is common practice. In cages located in rivers, carnivorous fish species Pangasius bocourti is used for intensive culture; about 70-80% of production is for export.

3. Profile of Freshwater Fish Farmers

This section is mainly based on the results of the Dissemination and Evaluation of Genetically Improved Tilapia Species in Asia (DEGITA) and carp improvement projects conducted during 1995-1996 and 1998-1999 respectively (ICLARM 1998; 2001). Table 3 summarizes the socio-demographic profiles of the fish farmers of the countries under review.

The average age of the Asian fish farmers ranges between 43 to 52 years and the average level of education ranges between 4 to 12 years. Chinese farmers in general had the highest level of education (12 schooling years). Percentage of illiterate farmers appears to have varied between 2% (Thailand) and 33% (India). Crop farming is the main occupation of the majority of the fish farmers in Bangladesh, Thailand and India, ranging from 41 to 65% of the total sample farms. The highest percentage of fish farming as primary occupation of the households in India (43%) is due to the inclusion of Andhra Pradesh in the sample, as 95 % of households are fully dependent in fish culture in Andhra Pradesh. However, in many other states such as Orissa, Uttar Pradesh fish culture is still in its infant stage. Fish culture as a main occupation is lowest in Vietnam (2 - 4%), followed by Bangladesh (9%) and Thailand (20%). Fish farming is subsidiary in Bangladesh and Vietnam and to some extent in Thailand, where it has mainly developed as a rural activity integrated into existing farming systems. In Bangladesh, ponds are used for various purposes (bathing, washing, etc) (Dey et al 2001; ICLARM 2001).

Except for the fish farmers that are engaged in cage culture, sample respondents have considerable fish farming experience ranging from 5 to 15 years across the selected countries. In general, most Southeast Asian countries have had a long tradition of aquaculture (De Silva 1996). This is one of the main reasons why Asia has remained the leader in aquaculture production, and it is likely to remain so.

Except for Vietnam, mostly the (male) heads of family carry out fish farming¹². In Vietnam, female participation is as high as 56%.

The farmers sampled in China are engaged in fish farming as their primary source of income. In Indonesia, FAO reported that about 78% of farming households cultivate fish in small ponds of less than 500 m², and aquaculture is the main source of income for 66% of the households that cultivate fish in paddy fields and ponds (FAO 2000).

The income structure shows that the average annual gross household income of the Chinese farmers ( about US$ 17 000) is the highest, followed by the Thai farmers (about US$ 11 000). The average gross incomes of state-owned, collective and co-operative farmers are US$ 149 135, US$ 184 963, and US$ 53 179 respectively in China. In general, the gross household income of fish farmers is above the national average income in China. The contribution of fish culture to total household income is as high as 80% in India and as low as 15% in Bangladesh. The contribution of carp farming to total income in India varies considerably between the states. It is only 15% in Orissa and 95% in Andhra Pradesh.

The average total area cultivated by households is as high as 4.91 ha for pond owners in the Philippines and as low as 1.04 ha in South Vietnam (Table 4). In China, though the family based households operate only 3.60 ha on an average, the state- owned large-scale farms are as big as 131 ha. Cage owners in the Philippines own on the average 1.26 ha of land, of which 43% is used for fish culture. The area allocated to the fish pond is 32% in North Vietnam followed by 31% in the Philippines, 24% in India and 26% in Thailand. On the average, size of fishpond is bigger in China (1.70 ha) followed by the Philippines (1.56 ha), Thailand (1.21 ha) and North Vietnam (1.16 ha). The average size fishpond is only 0.20 ha in Bangladesh.

Except for China and North Vietnam, the freshwater farms are mostly family-owned where members of the family assist in the operation. In China and North Vietnam a considerable proportion of farms are under state and collective ownership. Also in China and the Philippines, large-scale operations exist which rely heavily on farm managers or caretakers for operation. The state ownership in India (30%) is usually of common water bodies, owned by the state Irrigation Department and managed by the Fisheries Department for fish culture, which involves only stocking. Joint ownership is common in India, Bangladesh, Thailand and Vietnam.

4. Economics of Key Freshwater Technologies

4.1. Costs and Returns

The latest available economic information of key freshwater technologies of the countries under study is presented. As the information on cost and returns differ across the countries by years, the data has been converted to 1999 prices using country specific wholesale price indices expressed in US$. Where raw data are available, we classify the farms into different intensity levels of input and fingerling stocking based on Edwards' (1993) classification (see Fig. 1). As expected, the costs and returns vary widely among technologies within and between the countries mainly due to differences in technology, production environments and resource endowments, and input costs. Table 5 presents the costs and returns of the different freshwater technologies in these countries.

In Bangladesh, tilapia monoculture in cages is more productive, capital intensive and profitable compared to other culture systems in the country. On average, yields of carp polyculture and tilapia monoculture are about 3 200 kg.ha^-1, and 612kg.ha^-1 respectively, with corresponding operating costs of US$ 184/ha and US$ 453/ha respectively. The estimated net returns are about US$ 1 117/ha and US$ 1 420/ha, for carp polyculture and tilapia monoculture respectively. Feed and labor costs are the two most important components of the total cost in most culture systems in Bangladesh, accounting for about 20% and 17% respectively of total costs.

In China, like Bangladesh, monoculture of tilapia in cages is more productive, capital intensive and profitable than monoculture of tilapia in ponds and polyculture of carps in ponds. Among pond culture systems however, though carp polyculture is more productive, it is more capital intensive and thus less profitable than tilapia monoculture. Unlike Bangladesh, the marketable price per unit of tilapia is higher than that of carps, and the revenue-cost (R-C) ratio of tilapia production (return for every US$ in cost) is higher, US$ 0.51 for pond and US$ 0.47 for cage. The yield of tilapia is around 5 860 kg.ha^-1 in ponds and 5 613 kg.ha^-1 in cages, with a total cost of about US$ 5 000/ha to US$ 7 300/ha respectively. On the other hand, the average yield of carp polyculture is around 12 085 kg.ha^-1 with a net return of US$ 2 212/ha. Monoculture of tilapia in cages and in ponds in China is two and ten times, respectively, more productive, cost-intensive and profitable than that in the Philippines. The intensive culture of tilapia in cages in the country is two times more productive, cost-intensive and profitable than that of semi-intensive culture. Feed is an important component of the total operating costs for both carp polyculture and tilapia monoculture, comprising about 40% to 50% of the total cost. Fertilizer makes the lowest contribution to total cost (1.5%).

Freshwater prawn culture in India is less productive (1 500 kg.ha^-1), but more cost- intensive (US$ 3 872/ha) and more profitable (US$ 4 273/ha) than any other freshwater technology in India. In most freshwater technologies, yield ranges between 4 000 and 7 000 kg.ha^-1. Weed-based fish culture has the lowest cost of production (US$ 540/ha). Fish feed accounts for as high as 68% of total costsin intensive carp polyculture and air-breathing fish culture, and as little as 0% for low intensive carp polyculture and sewage fed-fish culture.

In Indonesia, common carp culture in FCS is more productive (574 kg.m^-2) and profitable (US$710/m²), and has a higher revenue-cost ratio (4.06). Culture of tilapia in DFCS and FCS generate a net return of US$ 492/m² and US$ 420/m² respectively. In general, culture in DFCS of any species is more productive and more profitable than other systems. The operating cost of tilapia monoculture in DFCS is high compared to tilapia monoculture in FCS due to higher feed cost. In most of the systems feed cost is the major component of total cost, accounting for about 50% to 70% of the total cost irrespective of species stocked.

Like India, freshwater prawn culture is the more profitable of the monoculture systems in ponds, while culture of striped catfish is the least profitable activity, although more productive. The rate of return over cost of striped catfish is also minimal (US$ 0.07), Comparing across production environments, cage culture of tilapia is more productive and profitable than that in ponds. For carp polyculture in ponds, the higher the intensity level, the higher the yield and net returns. Feed cost is the most important component of variable cost in most species and at most intensity levels.

Like in other countries, extensive (traditional) culture of fish in Vietnam is not profitable and there is a wide gap between extensive and semi-intensive systems in terms of productivity and profitability. As in Bangladesh, China and Thailand, cage culture of tilapia in the Philippines is more productive, input intensive and profitable than pond culture of the same. The R-C ratio is also higher in cage culture (1.40) than that in pond culture (1.20).

4.2. Factor Shares

An analysis was conducted to determine the share different factors of production contribute to the total gross value of production. In the literature, there are two methods to determine the factor share of production: accounting and econometric methods. In this paper, we used the accounting method, as we do not have enough information to follow the econometric method. Using the cost and returns data, the corresponding factor share is computed and the results are presented in Table 6.

The distribution of the share of output accruing to different factors of production varies between the countries. In Bangladesh, India and Vietnam a high proportion of gross value of production is considered as residual or "pure profit". In China, Thailand and the Philippines, a substantial percentage of the gross value of production is attributable to current inputs. As expected, among the current input costs, feed alone accounts for almost 50% of the gross value of production. It should be noted that in Bangladesh, India, Thailand and Vietnam, a substantial amount of feed is own-farm produced, which can be added to family income together with the amount of family labor.

5. Determinants of Yield and Feed Used

As shown in the cost-return and factor share analysis, feed is the most important input in most of the aquaculture technologies in these countries. In an earlier study on India, it was argued that the variations in experimental yield and actual yield were found largely due to gaps in the level of adoptions of recommended inputs, especially feeds (Jayarama 1998). The level of supplemental feed use determines the intensity level of a given farm. Fish farmers who follow intensive culture use recommended feed with proportionally more protein and less carbohydrate content than semi-intensive and extensive culture systems (Panayotou et al. 1982; Edwards 1993; Tacon 1997; Dey et al. 2001). It is therefore essential to determine the nature of feed used and its effect on yield. Equally important is to understand the factors that influence level of feed used by farmers so that appropriate recommendations can be made for future intensification. This section tries to determine the nature and determinants of feed use in Bangladesh, China, India, Thailand and Vietnam. Modified transcendental logarithmic (Translog) production functions were estimated for semi-intensive and intensive farms in these countries using the four most important input variables (stocking density, feed, fertilizer and pre-harvest labor) and their corresponding second-order terms¹³. Mathematically, the modified translog production function can be written as:

This specification allows us to determine if feed application exhibits diminishing returns to scale. Chow test (Greene 2000; Johnston 1984) is conducted to test whether the second order terms of the specified translog model are statistically significant (e.g. if the modified translog captures the production process of freshwater fish). Failure to reject the hypothesis reduces the translog specification to Cobb-Douglas (CD) functional form. Results of the production function estimation are presented in Table 7.

Results showed that except in Thailand, the modified translog captures the production of freshwater fish in these countries. In Thailand, the CD functional form is an adequate representation of its data. The positive sign of the estimated coefficient of protein and the negative signs of its corresponding second-order term in Bangladesh, India and Vietnam imply that feed application exhibits diminishing returns to yield in these countries. This implies that on average, increasing feed application increases yield up to a certain point only. Further increment of feed decreases yield.

To analyze the determinants of feed application, level of feed used (in the form of crude protein) is regressed on some of the farm and farmer-specific characteristics presented in Tables 3 - 4. In countries where not all farmers applied feed (e.g. presence of extensive systems), Tobit models are estimated (Tobin 1958). The country-specific functions for feed application are as follows:
Bangladesh:

Thailand:

Results of the analysis are presented in Table 8. A clear pattern seen from the results is that the level of crude protein increases as stocking density and/or nitrogen application increase, and decreases when its price increases. In Bangladesh and India, feed application increases as income increases. Also in Bangladesh, feed application is higher in non-alluvial soil and turbid water types. In India, more experienced farmers who own the ponds privately, tend to apply more feed than less experienced farmers who are non-private owners.

6. International trade of tilapia

Except for a few high-value fish, freshwater fish species are not an internationally traded commodity. Over the past decade however, there has been a dramatic increase in the international trade of tilapia in various forms (e.g. fillet fresh, fillet frozen and frozen),in which the USA has emerged as the main importer (Dey and Paraguas 2001). On a live weight basis, tilapia is now the third largest imported aquaculture product entering the USA after farm-raised shrimp and Atlantic salmon. Large producers of tilapia, Asian countries, specifically Taiwan, China, Indonesia, and Thailand, and the Central American countries Costa Rica, Equador and Hoduras are the major exporters to the US. Recently, Dey and Paraguas (2001) evaluated and compared the competitiveness (comparative and competitive advantages) of the major exporter Asian countries (Bangladesh, China, Indonesia, Philippines, Taiwan and Thailand) in producing and exporting frozen tilapia to the USA, using a domestic resource cost (DRC) approach. They concluded that all countries in their study have comparative advantages in producing tilapia, except for tilapia cage culture operations in China(Table 9). After accounting for market distortions in the domestic economy of each country, only pond culture in Thailand and cage culture in Indonesia can successfully compete with other countries in exporting tilapia to the USA. Due to the unavailability of import prices of tilapia by size in the USA, the difference in international prices of tilapia due to variations in quality was not taken into consideration in their study¹⁴. Consequently, the average import price in the USA in 1999 was used as border price (indicative price) in all countries after adjustment for the cost of freight and insurance.

7. Summary

Freshwater aquaculture has developed mainly in Asia. Asia provides about 94% of the world's total freshwater aquaculture production. China alone contributed 74% of the world's total freshwater aquaculture production. China together with India, Bangladesh, Vietnam, Indonesia, Thailand, Taiwan province of China and the Philippines are the top producers of freshwater fish within Asia, contributing about 92% of the world's total freshwater aquaculture production. Freshwater fish production in Asia has increased rapidly over the last decade. Vietnam achieved the highest annual growth in freshwater aquaculture (15%), followed by China (14%), Bangladesh (13%), Thailand (9%), and Indonesia (6%) between 1990 and 2000. This paper provides a comparative analysis of the different freshwater aquaculture technologies and profiles of freshwater fish farmers and their farming systems, costs, returns and productivity in Bangladesh, China, India, Indonesia, the Philippines, Thailand and Vietnam.

Aquaculture in Asia was developed mainly as a rural activity integrated with existing farming systems. Aquaculture in the region is diverse and consists of a broad spectrum of systems, practices and operations, ranging from backyard and small-scale in Bangladesh and Vietnam, and household pond systems to large-scale, highly intensive practices in China. In general, freshwater fish farming in Asia is dominated by small-scale farmers who are predominantly dependent on rice farming. Fish farming is not the primary occupation of most households, except in China and Indonesia. Freshwater fish farming in Asia is carried out in ponds, cages/pens, paddy fields and ditches. Polyculture in ponds is common except for Indonesia and Philippines where monoculture in running water systems and cages respectively, are the dominant forms of freshwater aquaculture. In addition, running water systems and raceways are also popular in Indonesian freshwater aquaculture. Integrated fish farming constitutes the major part of aquaculture in Vietnam and Thailand. The choice of either monoculture or polyculture depends on the selected species. Monoculture is used for carnivorous species, such as walking catfish, snakehead, freshwater prawn (Macrobrachium rosenbergi), catfish and sand goby. The omnivorous species like tilapia, silver barb, common carp, Chinese carp and mrigal are cultured together. In addition, fish culture integrated with pig, poultry and rice farming, also exists in Thailand.

Pond polyculture of Indian major carps and other Chinese and exotic carps is the most common form of freshwater aquaculture in Bangladesh. Pond polyculture of Chinese carps is widely practiced in China. In India, the composite fish culture (CFC) of three to six Indian major carps and Chinese carps is the dominant culture system. Unlike in other countries, monoculture in cages is widely practiced in Indonesia and the Philippines. While tilapia is widely cultured in cages in the Philippines, common carp and tilapia are grown in floating net cages in Indonesia. In Thailand, polyculture of carps with tilapia and silver barb and monoculture of catfish and snakehead in ponds are the major freshwater technologies. In Vietnam, polyculture of fish in ponds combined with two other farming systems, such as vegetable or fruit gardens, and livestock pens (the VAC household-scale integrated farming system) is widely practiced.

Pond operators in all the countries under consideration apply fertilizer and feeds, although the type and quantity of feeds vary. Fish farmers in Bangladesh, India and Vietnam use relatively less supplementary feed and other inputs than those in China, the Philippines and Thailand. In Indonesia, running water systems (RWS) are found to adopt both semi-intensive and intensive methods, while rice-fish culture follows an extensive culture method.

Productivity and costs of freshwater fish farming vary among the countries, consistent with the production environment technology, culture practices and farming systems. Cage culture is the most productive and profitable. Productivity, cost intensity and profitability increases in tandem with level of intensity.

Feed cost accounts for most of the total cost in most technologies in China, the Philippines, Thailand, and for RWS and cage culture in Indonesia. Analysis of the share of output accruing to factors of production shows that a high percentage of gross value added in most freshwater technologies is considered "pure profit" in Bangladesh, India and Vietnam. This is because a substantial amount of feed comes from the farmer's own farm. In China, Indonesia, Philippines and Thailand on the other hand, a substantial percentage of the gross value added in most of the freshwater technologies is attributed to current inputs.

Results of the production function show that feed application in Bangladesh, India and Vietnam exhibit diminishing returns to scale. Results on the analysis of the determinants of fish feed use reveal that in general, stocking density, nitrogen application and price of feed determine the level of feed application. In China, feed is used as a substitute for fertilizer. Results also show that, in Bangladesh and India, feed application increases as income increases. In Bangladesh, feed application is also higher in non-alluvial soil and turbid water. Experienced farmers in India who privately own ponds tend to apply more feed than less experienced farmers who are non-private owners.

Recommendations

As the biophysical potential for growth in freshwater aquaculture is still far from being exhausted in most of these countries, the full potential of freshwater aquaculture is yet to be realized. Often, plans for support of new areas that are under-utilized result in inefficiencies, a common problem for many developing countries not only in Asia. Thus the sector may require new approaches to realize its goals. These approaches may be different in different countries, depending on specific circumstances and national development plans, goals and aspirations. The challenge is to develop such approaches, realistic and achievable, within the context of current social, economic, environmental and political circumstances. Such approaches should not focus only on increasing production, they should also focus on providing a product which is affordable, acceptable and accessible to all sectors in the society.

As to increasing productivity, productivity could be enhanced by bringing extensive culture to semi-intensive culture or by adopting recommended input levels. Other significant issues which need to be addressed include conflicting land use, disease control and general environmental problems arising from aquaculture development, such as critical habitat loss, species introduction and pollution.

Lastly, the future development of aquaculture in general and freshwater aquaculture in particular in the region will depend on improvements in new adaptive research and management. As the countries in the region do not have the same levels of expertise, training and state of technology, some would benefit from the expertise and technologies of other countries as stated in Bangkok Declaration and Strategy for Aquaculture Development Beyond 2000.

References

Ahmed, M. (1997). Policy issues deriving from the scope, determinants of growth, and changing structure of supply of fish and fishery products in developing countries. Paper presented at the International Consultation on Fisheries Policy Research in Developing Countries: Issues, Priorities and Need, 2-5 June 1997 at Hirtshals, Denmark.

Ahmed, M, Rab, M.A. and Bimbao, M.P. (1995). Aquaculture technology adoption in Kapasia Thana, Bangladesh: Some Preliminary Results from Farm Record-Keeping Data. ICLARM Technical Report, 44. ICLARM, Philippines. 43 p.

Alam, S (2001). A study on production, accessibility and consumption patterns of aquaculture products in Bangladesh. Production, Accessibility, Marketing and Consumption Patterns of Freshwater Aquaculture Products in Asia: A Cross-Country Comparison. FAO Fisheries Circular. No. 973. Rome, FAO 2001. 275p.

Anon, (1992). Reflections on failure of Indian aquaculture. Fish Chimes 12(7):1-4.

Bhatta, R. (2001). Production, accessibility and consumption patterns of aquaculture products in India. Production, Accessibility, Marketing and Consumption Patterns of Freshwater Aquaculture Products in Asia: A Cross-Country Comparison. FAO Fisheries Circular. No. 973. Rome, FAO 2001. 275p.

Brugere, C., McAndrew K. and Bulcok, P. (2000). Social impacts of cage aquaculture on communities in Bangladesh. Aquaculture Asia, 5:29-33.

Cen, F. and D. Zhang (1998). Development and status of aquaculture in Peoples' Republic of China. World Aquaculture, 29(2):52-56.

Currie, D. J. (2000). Aquaculture: Opportunity to benefit mankind. World Aquaculture 31(1):44-49.

De Silva, S. S. (1996). A review of the major trends in Asian Fisheries. In Perspective in Asian Fisheries - A Volume to commemorate the 10th anniversary of the Asian Fisheries Society (ed. S.S. De Silva), 479 pp. Asian Fisheries Society, Makati City , Philippines.

Dey, M.M., Bimbao, G.P., Yong, L., Regaspi, P., Kohinoor, A.H.M., Pongthana, N. and Paraguas, F. J. (2000). Current status of production and consumption of Tilapia in selected Asian countries. Aquaculture Economics and Management. 4(1&2):47-62

Dey, M.M. and Paraguas, F. J. (2001). Economics of Tilapia Farming in Asia. In Tilapia: Production, Marketing and Technological Developments, (eds. S. Subasinghe & T. Singh), pp. 33-46. Proceedings of the Tilapia 2001 International Technical and Trade Conference on Tilapia. 28-30 May 2001, Kuala Lumpur, Malaysia.

Dey, M.M., Paraguas, F. J. and Alam, F. Md. (2001). Cross-country synthesis. Production, Accessibility, Marketing and Consumption Patterns of Freshwater Aquaculture Products in Asia: A Cross-Country Comparison. FAO Fisheries Circular. No. 973. Rome, FAO 2001. 275p.

Directory General Fisheries (DGF). (1999). Fisheries Statistics of Indonesia. Directorate General of Fisheries, Department of Agriculture, Jakarta, Indonesia.

Edwards, P. (1993) Environmental issues in integrated agriculture - aquaculture and wastewater-fed fish culture systems. In Environment and Aquaculture in Developing Countries. (eds. R.S.V. Pullin, H. Rosenthal & J.L Maclean), pp. 139-170. ICLARM Conference Proceedings 31. International Center for Living Aquatic Resources Management, Manila, Philippines.

FAO 2000. The State of world fisheries and aquaculture. Food and Agriculture Organization of the United Nations. Viale delle Terme di Caracalla, 00100 Rome, Italy.

FAO (2002). FishStat+ v.2.3. Available [Online]: http://www.fao.org/fi/statist/Fisoft/FishPlus [2002, August]

Greene, W.H. (2000). Econometric Analysis. 4^th ed. Macmillan Publishing Company.

Gupta, M. V. and Rab, M.A. (1994) Adoption and economics of silver barb (Puntius gonionotus) culture in seasonal waters in Bangladesh. ICLARM Technical Report, 41, 39 p.

Hambrey, J., Beveridge M. and McAndrew, K. (2001). Aquaculture and poverty alleviation I: cage culture in freshwater in Bangladesh. World Aquaculture 32 (1):50-51, 53-55, 67.

Huang, J., Xu, J. and Qiao. F. (2001). Production, accessibility and consumption patterns of aquaculture products in China. Production, Accessibility, Marketing and Consumption Patterns of Freshwater Aquaculture Products in Asia: A Cross-Country Comparison. FAO Fisheries Circular. No. 973. Rome, FAO 2001. 275p.

ICLARM (1998). Dissemination and Evaluation of Genetically Improved Tilapia Species in Asia: Final Report. Asian Development Bank Regional Technical Assistance No. 5558, International Center for Living Aquatic Resources Management, Makati City, Philippines.

ICLARM (2001). Genetic Improvement of Carp Species in Asia: Final Report. Asian Development Bank Regional Technical Assistance No. 5711, International Center for Living Aquatic Resources Management, Penang, Malaysia.

Ismayanti (2001). A status report on the key aquaculture technologies and fishing practices in Indonesia. Unpublished progress report submitted to ICLARM-WorldFish Center.

Jayarama, R. (1998). Economics and Technical Efficiency in Carp Culture in Thanjavur District, Tamil Nadu State, India. In IIFET '98 Tromso (eds. A. Eide and T. Vassdal), pp. 71-82. Proceedings of the 9^th International Conference of the International Institute of Fisheries Economics and Trade. Tromso, Norway.

Johnston, J. (1984). Econometric Methods. 3^rd Edition. McGraw-Hill, New York.

Kontara, E, K. and Maswardi, A. (1999). Present status of common carp farming in Indonesia. World Aquaculture 30 (4): 14-16, 60-62.

Lovatelli, A. (1997). Status of aquaculture in Vietnam. Aquaculture Asia,2(3):18-24.

Luu, L.T. (1999). Vietnam's small-scale aquaculture for better rural livelihood. Aquaculture Asia 4(3):14-16.

Mazid, M.A. (1999). Developmental needs and research priorities for fisheries in Bangladesh. In Priorities in Aquatic Resources Research in the Asia-Pacific Region (eds. M.V. Gupta & N. Macawaris-Ele), 39 p. ICLARM Conf. Proc. 62

Panayotou, T., Wattanutchariya, S., Isvilanonda, S. and Tokrisna, R. (1982) The Economics of Catfish in Central Thailand. ICLARM Technical Reports 4. Kasetsart University Research and Development Institute, Bangkok, Thailand and International Center for Living Aquatic Resources Management, Manila, Philippines.

Saha, C. and Paul, B.N. (2000). Flow through system for industrial aquaculture in India. Aquaculture Asia 5(4):24-26.

Shaleesha, A. & Stanley, V.A. (2000). Involvement of rural women in aquaculture: an innovative approach. NAGA, the ICLARM Quarterly, 23(3):13-16.

Shuping, C. 2002. International trade in aquaculture products - China. INFOFISH International 1: 20-24.

Tacon, A.G.J. (1997). Regional Reviews: Asia. In Review of the State of World Aquaculture. FAO Fisheries Circular No. 886, Rev. 1, FIRI/C886 (Rev.1) ISSN 0429-9329.

Tobin, J. (1958). Estimation of relationships for Limited Dependent Variables, Econometrica, 26: 24-36.

Upare, M.A. (1999). Financing India's aquaculture development. Aquaculture Asia, 4(3): 22-25.

Wahab, M.A., Rahman, M.M. and Milstein, A. (2001). The effect of common carp, Cyprinus carpio, and mrigal, Cirrhinus mrigala, as bottom feeders in Indian carp polyculture. World Aquaculture 32(4): 50-52, 69.

Williams, M. (1996). The transition in the contribution of living aquatic resources to food security. International Food Policy Research Institute: Food, Agriculture, and the Environment Discussion Paper No.13, 41 p.

Zhao, W. (1998). Prospect of China's aquaculture sector. China's Fishery Economics Research 1:12-14.

 

1	Final version of this paper will be included on the next Update/Semi-Annual Progress Report. This paper was submitted to Aquaculture Economics and Management Journal for consideration.
2	Due to cultural reasons, households in Malaysia and Sri Lanka have not produced substantial amounts of freshwater fish in the past; as a result detailed information on aquaculture practices is not available in the literature and therefore these countries are excluded from the analysis. Detailed information on freshwater aquaculture is being collected in Malaysia and Sri Lanka under this RETA project.
3	Particularly in China, several factors contributed to the rapid development of freshwater aquaculture and aquaculture in general. Technological changes, reforms in land tenure and water user rights as well as other institutional reforms, price and market liberalization all contributed to the area-expansion for aquaculture and the growth in productivity. Among these factors, technological change has been the primary engine for growth in aquaculture since the 1980s (Huang et al. 2001).
4	Production of cage culture in Indonesia achieved the highest growth (49%) during 1987-1996 (ICLARM 2001; DGF 1999).
5	In Bangladesh and in several countries in the region (Currie 2000), fish ponds are built alongside houses, and are used in many ways (i.e. bathing, washing dishes and cloths, etc) in addition to stocking them with fish (ICLARM 2001; Alam 2001).
6	Estimated production was only 80 t during 1993, it substantially increased to 1 865 in 1997.
7	Usually six to seven carp species are stocked in the prepared ponds at a stocking rate of 5 000 to 10 000 /ha with an expectation of producing 2 - 3 t.ha-1 (Wahab et al. 2001)
8	The technology consists of very small cages, 1 m3, which can be made at a nominal cost of US$ 5; and depending on species and grow out period (3 - 9 month), the annual gross income per cage is US$ 20 -100. Although it looks promising, its short history has been beset by failure, primarily due to inappropriate technology transfer (Brugere et al. 2000).
9	The CFC is regarded as a standard yield-maximizing practice of carp culture technology. The technology, which was developed by CIFRI, Barrackpore, has been widely accepted (Upare 1999).
10	This was studied and designed by the Central Institute of Freshwater Aquaculture (CIFA) (Saha and Paul 2000).
11	The fish/shrimp pond contributes about 30-70% to total household income, although the proportion of pond area is smaller than the land area for agriculture (Luu 1999; FAO 2000). In most cases, fish is produced primarily for household consumption; the surplus is sold.
12	However, over the years as aquaculture has become an important income-generating household activity, participation of women has been increasing in Asia. Recently, in many countries women have begun to share with men in fish rearing and monitoring activities. In Bangladesh, women are not usually permitted to go out for fieldwork, or to market, and thus have time for fish husbandry, as in many instances ponds are within their homesteads (Williams 1996). Information dissemination and training schemes on flexible technological choices have significantly enhanced women's participation, as well as productivity and the rate of technology adoption in Bangladesh (Ahmed 1997; Ahmed et al. 1995; Gupta & Rab 1994). Shaleesha and Stanley (2000), reported that in fresh and brackish water aquaculture, women in India were engaged in carp polyculture, nurseries, breeding of catfish and freshwater prawns in backyard hatcheries, ornamental fish breeding and culture of Spirulina and Azolla, net making and mending, and feed preparation of carps and prawns. In Thailand, India and the Philippines, women are very actively involved in fish marketing and processing. In some cases women also carry out and participate in fish culture and fishing operations. Fish processing activities are undertaken either individually or as a family enterprise, while fish marketing is done by individuals, usually by the wives of fish farmers. In urban communities, the involvement of women is mostly in marketing, either as broker /wholesalers and /or retailers.
13	Due to lack of sample size, it is not possible to estimate production function at every intensity level.
14	Product differentiation due to a wide variation in product attributes, such as species, size of fish, texture and colour, is an important factor leading to price differentials. In effect, difference in price (border price), together with differences in yield levels/quality and production costs are the significant factors which affect the level of competitiveness in producing and exporting a commodity.