Notes for a Technical Seminar on Aquaculture and Economic Growth
| ALCOM | GCP/INT/555/SWE |
| Aquaculture for Local Community Development Programme | GCP/RAF/277/BEL |
ALCOM Field Document No. 19
| Notes for a Technical Seminar on Aquaculture and Economic Growth |
| TABLE OF CONTENTS |
Held during ALCOM's Steering Committee Meeting,
11–14 February 1992, Mangochi , Malawi
by U.N. Wijkstrom
Economist, Consultant
Funding Agencies:
SWEDISH INTERNATIONAL DEVELOPMENT AUTHORITY
BELGIAN ADMINISTRATION FOR DEVELOPMENT CO-OPERATION
Executing Agency:
FOOD AND AGRICULTURE ORGANIZATION OF THE UNITED NATIONS
Harare, Zimbabwe, November 1992
This field document was prepared during the course of the project identified on the title page. The conclusions and recommendations contained in the document are those considered appropriate at the time of its preparation. They may be modified in the light of further knowledge gained at subsequent stages of the project.
The designations employed and the presentation of material in this document do not imply the expression of any opinion whatsoever on the part of the United Nations or the Food and Agriculture Organization of the United Nations concerning the legal or constitutional status of any country, territory or sea area, or concerning the delimitation of frontiers.
A technical seminar on aquaculture and economic growth was held on February 12, 1992, in Mangochi, Malawi. It was part of the Fifth Steering Committee meeting of ALCOM (Aquaculture for Local Community Development Programme).
The seminar was led by Mr Ulf Wijkstrom, economist (consultant) and author of ALCOM Report No. 9 “How Fish Culture can Stimulate Economic Growth: Conclusions from Fish Farmer Surveys in Zambia”. The seminar was organized in view of the importance of the subject, and the significance of the report's findings and recommendations.
Mr. Wijkstrom's “notes” for the seminar are being published in this document, along with illustrative diagrams, as an aid to the seminar participants. It will also interest others within and outside the region who did not take part in the seminar.
ALCOM is a regional fisheries/aquaculture programme of the FAO (Food and Agriculture Organization of the United Nations). Based in Harare, Zimbabwe, it covers all the member-countries of SADCC (Southern African Development Coordination Conference): Angola, Botswana, Lesotho, Malawi, Mozambique, Namibia, Swaziland, Tanzania, Zambia, Zimbabwe.
ALCOM activities include introduction and extension of fish farming; integration of aquaculture into existing farm systems; surveys of fish farmers; better utilization of the fisheries potential of small water bodies; improving the role of women in fisheries and aquaculture; assistance in planning and project formulation; and information dissemination.
The aim of ALCOM is to assist member countries improve the living standards of rural populations through the practice of aquaculture. Toward this end, pilot activities are conducted in member countries to demonstrate new techniques, technologies or methodologies. Successes achieved, ideas derived, lessons learnt, are applied on a wider scale by member governments.
ALCOM is funded by Sweden and Belgium. Its preparatory phase began in 1986, and its first implementation phase in October 1990.
Address:
| Mail : | P O Box 3730, Harare, Zimbabwe |
| Telex: | 26040 FAO ZW |
| Tel.: | 263-4-724985 |
| 263-4-734797 | |
| Fax : | 263-4-729563 |
Hyperlinks to non-FAO Internet sites do not imply any official endorsement of or responsibility for the opinions, ideas, data or products presented at these locations, or guarantee the validity of the information provided. The sole purpose of links to non-FAO sites is to indicate further information available on related topics.
This electronic document has been scanned using optical character recognition (OCR) software. FAO declines all responsibility for any discrepancies that may exist between the present document and its original printed version.
3. PART I: THE FARMER'S RULES FOR DECIDING WHAT TO PRODUCE AND HOW TO DO IT
3.1 The farmer's setting
3.2 The farmer's problem
3.3 Conclusion
4. PART II: THE PURPOSE: SUSTANING AND INCREASING INCOME
4.1 The context
4.2 National income and national product
4.3 Effects on national income of introducing fish farming: the case of substitution
4.4 Effects on national income of introducing fish farming: the case of addition
4.5 Conclusion: starting or expanding fish culture
4.6 Modernizing: introducing better technology
4.7 Conclusion
5. PART III: THE SIZE OF GOVERNMENT'S EFFORT
5.1 Financing and impact of public services
5.2 The role of the fishery administration
5.3 What share of tax revenue for fisheries?
5.4 The concept of “Consumption Effect”
6. RECOMMENDATIONS FOR FISHERIES DEPARTMENTS
6.1 Advice to farmers
6.2 Government contacts
6.3 Organization of Aquaculture Development Unit
7. ISSUES ARISING DURING THE STEERING COMMITTEE MEETING
7.1 Extensive versus intensive aquaculture: the economist's perspective
7.2 Economic viability and rural surveys
7.3 Aquaculture and economic growth
1. The typical farmer's production mix: Deficient access to markets: underemployment and idle resources
2. How to produce 50 kgs of tilapia in ponds/year: alternative combination of inputs
3. Declining marginal physical productivity (manure)
4. Cost of manure determining quantity used if purchased
5. Cost of manure determining quantity used: available on-farms
6. Allocation of fixed quantity of input
7. Increased price of tomatoes; effect on use of manure?
8. Increased salaries; effect on use of labour in fish culture
9. The typical farmer's production mix: Unlimited maize markets but labour shortage
11. Economy-land: National accounts, 1994
12. Fish farming - contribution to economic growth; a function of the previous employment of inputs
13. Farmers' income from a kg of fish: role of the ‘consumption effect’
14. Net income of a 5 ha fish farm: effects of discounting on investment decision
15. Selection of priority areas for fish farm extension
16. The typical Zambian farmer's participation in the monetary economy economic growth.
Economic behaviour of the small-scale farmer
The seminar was divided into four parts. The first examined the economic behaviour of the typical small-scale farmer. He grows four or five agricultural crops with the land, water, manure, farm tools and household labour he has available. Fish farming is a secondary activity. Whether he takes up fish farming and to what extent depends on how beneficial it is likely to be. If he opts for fish farming, he foregoes some other option. He has to weigh the likely costs and benefits of such a choice -- in particular, the costs of the various inputs for each option, and the prices he can charge for the outputs. On the basis of this assessment, he may opt for a combination of fish farming and one or more agricultural crops, or he may not take up fish farming at all.
Extension advice to the small-scale farmer has to be based on economic realities. It may be inappropriate to urge an increase in fish pond production if this means the farmer must divert to fish ponds fertilizer that can be more productively deployed in agriculture. If fish ponds in an area lie abandoned, it may be because they have outlived their economic utility; extension work should focus then on improving the output per man hour of any pond that is still in use.
Goals of fish farming
The seminar's second part discussed the goals of fish farming, from the standpoint of the government as well as the fish farmer. The point was made that the goals of government economic policies coincide with those of farmers who culture fish. The government wants to promote national income by increasing the production of goods and services in the country -- including fish. The farmer, according to the surveys conducted in Zambia, engages in fish farming to increase his consumption, either by eating more fish or by selling fish and buying something he needs.
The purpose of the fisheries department in promoting fish culture should be to increase national income. How is this done most effectively? In areas where the economy is stagnant, the department should strive primarily to interest farmers who have idle resources (land, water, labour) to use these for fish farming. This is so because the larger the share of previously idle resources in the total resources used, the greater the national income.
In regions with economic growth, priority should be given to assisting farmers who have fish ponds to increase their productivity per man day of labour.
The farmer prefers fish culture to some other activity only if it increases in a sustainable manner the income he earns per hour or day worked. Higher fish yields interest practising fish farmers only if they result in greater net income per day worked.
Magnitude of Government effort in fish farming
The seminar's third part discussed the size or magnitude of government effort into fish farming, and the economic validity of such effort. It showed how fishery administrations can substantiate the case for rural fish farming in spite of the small volumes of fish produced.
Most Government departments have to pay for their staff and equipment with funds obtained from households: taxes. The departments compete with one another for a share of tax revenues.
How much tax revenue should a government put into fish farming? How far is the deployment of resources or taxpayers' money to fish farming justified? The seminar leader cited two reasons why fish farming is important despite the small volumes of fish produced.
The consumption effect on production.
The likelihood that the farming communities concerned attach much importance to the long-term effect of increased incomes resulting from this allocation of tax revenue.
The consumption effect refers to the positive impact of government policy on an individual's living standards -- on nutrition, health and education, for example -- which lead to a long-term increase in national income. Resources expanded on fish farming in a stagnant economy generate returns not merely through fish production. The farmer's family is better-fed, healthier and better educated. It gets more productive in the long run. Investment in fish farming becomes a government investment into the future.
Recommendations for fishery departments
The recommendations addressed how a Fish Culture Development Unit (FCDU) should deal with (i) the farmers/fishermen (ii) other government units (iii) the use of resources within the unit. The recommendations also gave weight to present policies of reducing the size of public administrations and of ensuring the efficiency and effectiveness of their activities.
While it is necessary for the FCDU to rank regions according to the priority for fish culture extension services, the cost of identifying these regions and of providing the advice must be reduced. The seminar leader confirmed the need to base the ranking not soly on physical data but include information on the economic and social setting of the farmer and his household. However, this does not mean that the whole region, or country, for which the FCDU is responsible should be surveyed. This is too costly, and even conceptually difficult (given the need to impute values to both inputs and outputs). Short cuts must be used.
The first short cut is the identification of priority areas, without conducting detailed surveys of social and economic conditions. The seminar leader argues that zones with stagnant economies, underemployment, unused land and water, and little or no fish ponds, are priority areas. This is because of the addition to national income which fish culture will provide in these areas. These areas can be tentatively identified by relying on data already available, in central or regional administrations. Subsequently brief visits should be carried out in these areas by qualified aquaculturists, agronomists and economists to confirm the reported conditions.
Once this has been done, extension work can start. This is the second short-cut. However, this extension work should preferably be carried out by agricultural extension workers instructed in the technologies of fish culture. These extension workers will know who are the farmers for whom fish culture may present an interesting alternative. In these regions, the farmers should do the work and should himself decide on the most suitable use of his available inputs, based on the extension workers' information about possible yields.
In areas with growing rural economies and a considerable number of fish ponds, the advice should focus on increasing the return per man-day of work in fish farming. As economies grow, leading to increasing specialization, farmers will probably need assistance in post-harvest activities, as well as in the management of ponds.
The FCDU must be prepared to defend the use of scarce resources for aquaculture as competing government services will point out that the volumes of fish produced are small. It can do this, by conducting (jointly with other government services) studies on the “Consumption Effect”; and by stressing productivity improvements (leading to growing earnings per man-day from fish farming). The FCDU must include a number if highly qualified staff, have access to transport, and to a well-equipped centre of excellence for fish culture development. It should concentrate more on adapting technological developments to local circumstances and less on producing fingerlings.