The Zambia surveys clearly showed that farmers undertake fish culture because they want to increase their consumption, not just for the sake of production. They either sell or eat the fish they produce. Cash income from sales is used to increase consumption.
Thus farmers have the same overriding goal as government: which is to increase the national income. This is achieved by increasing the production of goods and services in the country. Thus, there is no contradiction between what farmers want and what Government (at the Ministerial level) wants.
Let us start by looking at the concept of National Income or National Product.
A national economy can be described, in a much simplified form, as a flow of goods, services and money between “households” and “enterprises”. See Figure 10. The simplification consists in the fact that no account is taken of government, banks, and international relations.
The economic relationships between households and enterprises can be described as two circuits; one “monetary” and one “real”. They go in opposite directions.
The real flow consists of factors of production from households to enterprises, and of goods and services from enterprises to households.
The monetary flow consists of payments for factors of production, from enterprises to households, and of payments for goods and services, from households to enterprises.
It is difficult and impractical to try to measure the size of the economic activities of a nation by adding cars, tomatoes, visits to the doctor, etc. Therefore monetary units are used to measure the national income and the national product. Normally the measurement covers activities carried out during one year.
The possibilities are (i) to measure the total value of the payment made to households for the factors of production used, or (ii) to measure the payments made by the household sector for goods and services.
To make this even clearer, consider the following example. In “Economy-land” the economy consists of seven enterprises: a farm; a fishing enterprise, a mine, a foundry, a producer of ovens; a mill and a bakery. The trade amongst these seven enterprises over a year is shown in Figure 112.
The gross national income can now be calculated by adding salaries and profits obtained by households as a result of their economic activities:
| Salaries: | |||
| * | farm | 20 000 | |
| * | fishing co. | 35 000 | |
| * | mine | 16 000 | |
| * | mill | 30 000 | |
| * | foundry | 20 000 | |
| * | oven factory | 48 000 | |
| * | bakery | 80 000 | 249 000 |
| Profits: | |||
| * | farm | 20 000 | |
| * | fishing company | 25 000 | |
| * | mine | 16 000 | |
| * | mill | 30 000 | |
| * | foundry | 20 000 | |
| * | oven factory | 20 000 | |
| * | bakery | 160 000 | 291 000 |
| Total gross national income | 540 000 | ||
Figure 11 : National accounts 1994, Economy-land
| 1. | The Farm | |||
| Salaries | 20 000 | Sale of grain | 40 000 | |
| Profit | 20 000 | |||
| TOTAL | 40 000 | TOTAL | 40 000 | |
| 2. | The Fishing Company | |||
| Salaries | 35 000 | Sale of fish | 60 000 | |
| Profit | 25 000 | |||
| TOTAL | 60 000 | TOTAL | 60 000 | |
| 3. | The Mine | |||
| Salaries | 16 000 | Sale of iron | 32 000 | |
| Profit | 16 000 | |||
| TOTAL | 32 000 | TOTAL | 32 000 | |
| 4. | The Mill | |||
| Purchase grain | 40 000 | Sale of meal | 100 000 | |
| Salaries | 30 000 | |||
| Profit | 30 000 | |||
| TOTAL | 100 000 | 100 000 | ||
| 5. | The Foundry | |||
| Purchase of iron | 32 000 | Sale of steel | 72 000 | |
| Salaries | 20 000 | |||
| Benefits | 20 000 | |||
| TOTAL | 72 000 | TOTAL | 72 000 | |
| 6. | The oven factory | |||
| Purchase of iron | 72 000 | Sale of ovens | 140 000 | |
| Salaries | 48 000 | |||
| Benefits | 20 000 | |||
| TOTAL | 140 000 | TOTAL | 140 000 | |
| 7. | The Bakery | |||
| Purchase of meal | 100 000 | Sale of bread | 340 000 | |
| Salaries | 80 000 | |||
| Benefits | 160 000 | |||
| TOTAL | 340 000 | TOTAL | 340 000 |
The gross national product (which in this case is identical to the gross national income) can be calculated by adding the payments made by households for goods and services during the year:
Goods and services bought by households:
| * | Bread | 340 000 | |
| * | Fish | 60 000 | |
| * | Oven | 140 000 | |
| Total gross national product | 540 000 | ||
Thus the intermediate products (grain, meal, iron, steel) are not included amongst the goods and services bought. On reflection the reason is obvious; these intermediate products have not been consumed by households, but by the enterprises, and are now “ingredients” in the two products bread and oven, bought by the households.
For material standards of living to increase, it is necessary that the value of goods and services bought by households (or, which amounts to the same, the combined value of salaries and benefits payed to households) increases more rapidly than the population.
Assume that in “Economy-land” the farm decides to reduce its grain-growing business by one fourth and produce fish in ponds with the liberated resources. To simplify the analysis, let us furthermore assume that it has no effect on the unit prices (salaries, bread price, etc).
The yearly “accounts” of the enterprises may now look like this:
“Economy Land”
The accounts, one year after introduction of fish farming
1. The Farm
| Salaries | 20 000 | Sales grain | 30 000 |
| Benefits | 95 000 | Sales fish | 85 000 |
| TOTAL | 115 000 | TOTAL | 115 000 |
4. The Mill
| Purchase grain | 30 000 | Sales meal | 75 000 |
| Salaries | 30 000 | ||
| Benefits | 15 000 | ||
| TOTAL | 75 000 | TOTAL | 75 000 |
7. The Bakery
| Purchase meal | 75 000 | Sales bread | 255 000 |
| Salaries | 80 000 | ||
| Benefits | 100 000 | ||
| TOTAL | 255 000 | TOTAL | 255 000 |
The other units in “Economy land” (enterprises 2, 3, 5 and 6) have not been affected.
The total Gross National Income for the year will be:
| * | The sale of ovens | 140 000 | |
| * | Sale of captured fish | 60 000 | |
| * | Sale of cultured fish | 85 000 | |
| * | Sale of bread | 255 000 | 540 000 |
From the perspective of the Finance Minister of “Economy land” nothing has been achieved. Total production is the same. The Finance Minister has little or no interest in whether the farm produces only grain or both grain and fish.
Let us assume instead that the farm has underutilized resources, which can be put to use through fish farming. The effects on “accounts” for the following year will then be:
1. The Farm
| Salaries | 30 000 | Sales of grain | 40 000 |
| Benefits | 40 000 | Sales of fish | 30 000 |
| TOTAL | 70 000 | TOTAL | 70 000 |
As the fish is sold directly to consumers, and the volume of grain production is kept unchanged, there are no effects on other enterprises.
Adding up the Gross National Product we get:
| * | Bread | 340 000 |
| * | Captured fish | 60 000 |
| * | Cultured fish | 30 000 |
| * | Ovens | 140 000 |
| TOTAL | 570 000 |
The total value of the cultured fish production (30 000) is in this case added to the gross national income, which increases from 540 000 to 570 000.
Fish Farming: contribution to economic growth: a function of the previous employment of inputs
The horizontal line is arbitrarily long, it connects the two extremes. All inputs are taken away from other uses, or all inputs were idle previous to the fish culture activity.
The horizontal line is arbitrarily long, it connects the two extremes. All inputs are taken away from other uses, or all inputs were idle previous to the fish culture activity.
From the standpoint of governments, it is thus more useful to promote fish culture when it will increase existing production, than to convince farmers to abandon a part of ongoing activities in favour of fish culture. This is illustrated in Figure 12.
It is of course seldom the case that the start up of an activity represents either a complete substitution or a complete addition. Most additions probably involve at least some substitution of other activities; most substitutions will involve more or less effort dedicated to the new activity.
Better technology from the farmer's standpoint is that which increases, in a sustainable manner, the income he earns per hour/day worked. This means, he is interested in obtaining higher yields (per m2 of pond surface area) only if it also means obtaining a greater net income for himself per day worked.
In this part of the analysis, we are not focusing primarily on the modifications in technology which take place as the relative prices of inputs are modified. We are interested in those which are introduced because of an improvement in know-how. If, for example, careful scrutiny of tilapias in Africa identifies one which grows at twice the speed (under similar feeding and pond management regimes) as T. nilotica, the substitution of this species by the former might contribute to increased production and income for fish farmers.
However, experience shows that the more developed the economy becomes, the harder it is to achieve economic growth (that is increases in production/person/year) through improvements in technology. A few per cent per year and person employed is usually the maximum.
The obvious conclusion from this, is that where there are established aquaculturists and a growing economy the task of aquaculture extension workers is not to convince farmers to get into the fish culture business. That will be achieved primarily by the demonstration effect of farmers who already culture fish in ponds. Farmers will watch their neighbours' fish ponds and get into the business if they think it is worthwhile. At this point the task of extension workers is rather to assist in improving the technology employed by the majority of farmers.
So far we have seen where the priority should lie but not how much effort should be devoted to fish culture promotion.
