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Introduction

Anthony T. Charles

The importance of aquaculture is rapidly growing worldwide, as a source of livelihood and income, as well as a crucial source of protein for the world’s people. This growth in importance is reflected in the remarkable growth of aquaculture production itself. In the decade from 1985 to 1995, total production (including aquatic plants) increased from 11.2 million metric tonnes (mt) to 27.7 million mt (FAO, 1995a; FAO, 1997a). The growth in aquaculture has been shared between inland areas, where total aquatic production grew by 2.7 times, and marine areas, where growth was roughly two-fold. From an economic perspective, the expansion of aquaculture has been at least as strong: over the period 1985-1995, the value of production almost tripled, from $ US 14.2 thousand million to $ US 42.3 thousand million.

Aquaculture’s share of global fisheries production (combining capture fisheries and aquaculture) has grown along with the absolute figures (e.g., from 8.3% in 1984 to 14% in 1992; FAO, 1995b). In fact, growth in aquaculture exceeded the increase in the world’s human population; for example, over the period 1984-1992, the per capita fish supply from aquaculture increased by 67% (FAO, 1995b).

Particularly important to note here is the fact that the vast majority of aquaculture production comes from developing countries. Indeed, focusing on fish and shellfish production in 1995, Asia (excluding Japan) accounted for almost 83% of production by volume and 68% of the total value (FAO, 1997a). In fact, China produced a remarkable 61% (by volume) of global fish and shellfish production, with India contributing another 8%. Indonesia, Thailand, the Republic of Korea, the Philippines, Bangladesh, Taiwan (P.C.) and Viet Nam are also listed in the world’s top 14 producing countries (FAO, 1997a). Other developing regions contribute much less to total global aquaculture production; for example, in 1995, South America provided only 1.6% by volume (but 4.1% by value), while Africa and Oceania each contributed only around 0.5%, whether measured by volume or by value (FAO, 1997a). However, there are important local aspects of aquaculture in each of these regions that are deserving of full examination. (Detailed analyses of aquaculture activity by region are presented later in this report.)

In keeping with the expanding importance of aquaculture, there is an expanding need for economic information on the part of policy-makers and planners. Indeed, this reflects a widespread trend in terms of economic information requirements in the era after the United Nations Conference on Environment and Development (UNCED). Yet, economic research has not often received the attention it deserves in aquaculture development. For example, a recent survey of aquaculture research priorities carried out by FAO and the Network of Aquaculture Centres in Asia and the Pacific (NACA), in 14 countries and territories of Asia, shows that less than 3% of ongoing national research projects are concerned with socio-economics, policy, planning and management aspects of aquaculture. Aquaculture research projects funded by donor agencies were found to show similar patterns; i.e., the majority supported technology-oriented (biotechnical) research (FAO, 1997b; personal communication).

While the economics of aquaculture may not have received its full share of research attention, nevertheless an increasing literature on the topic has emerged in recent years. Joining the long-standing mainstay journals on aquaculture science (e.g., Aquaculture, Aquaculture Research), and related scientific journals (e.g., Journal of the Asian Fisheries Society, Canadian Journal of Fisheries and Aquatic Sciences) are international economics-oriented outlets such as Marine Resource Economics, American Journal of Agricultural Economics, and most recently Aquaculture Economics and Management. A number of newsletters, including NAGA: The ICLARM Quarterly, from the International Centre for Living Aquatic Resources Management, and FAN: The FAO Aquaculture Newsletter, provide broad summary coverage of aquaculture in developing nations. Furthermore, a large part of new (and old) literature on aquaculture in developing countries appears in local outlets and internal government publications (the so-called ‘grey’ literature) as well as the scientific publications of FAO, ICLARM, and other international and regional agencies. To assess the state of aquaculture economics worldwide, it is clearly crucial to examine the full range of literature on the subject.

This report attempts such a study of available literature on aquaculture economics in developing countries, adopting a broad, integrated view of aquaculture, encompassing both micro- and macro-economics, socio-economics, regional economics, environmental economics, relevant aspects of the farmer’s non-aquaculture activities (household economics), as well as social and cultural considerations. The report contains two principal components, described in detail below: a set of three regional assessments (examining both the economics of aquaculture activity, and the state of the art in aquaculture economics research within each region); and a set of annotated bibliographies, compiling available literature on aquaculture economics, for each region and of a general nature.

Special attention is paid here to rural aquaculture, notably small-scale aquaculture integrated with other farming activities (integrated agriculture-aquaculture systems, also referred to as integrated fish farming). However, the report is not restricted to these areas; economic features are reviewed for the full range of production systems in developing countries. Indeed, an understanding of all such systems - -- ‘industrial’, ‘commercial’, ‘small-scale commercial’ and ‘subsistence’ - is of importance to development planning at the national level, particularly in facilitating decisions on the allocation of resources and on integration of aquaculture into development planning for coastal zone and watershed areas.

It is important to note that the various production systems require different emphases in terms of economic analysis. For example, marketing channels, export considerations and greater emphasis on environmental economics analyses are crucial to most studies of industrial aquaculture. On the other hand, in subsistence aquaculture, which is focused on on-farm and local consumption, the challenge is to properly account, in economic terms, for the non-market value of the production, as well as the household and community-level economics involved. Between industrial and subsistence systems lie the commercial (but non-industrial) levels of production. In these levels, production typically enters the market system, but the scale of activity is less intensive, with generally smaller operations, than in the industrial mode. It is of interest to note that, judging from the material presented herein, the literature on aquaculture economics focuses in Africa particularly on the subsistence system, in Asia largely on commercial systems, and in Latin America primarily at the industrial level (shrimp and salmon).

1. ORGANIZATION OF THE REPORT

The report consists of two principal components.

First, a trio of regional assessments are presented, one for each of three regions: Africa and the Middle East, Latin America and the Caribbean, Asia and the Pacific. Each assessment was prepared independently by the participants dealing with that particular region (as noted in the Table of Contents and at the start of each assessment). For this reason, while there is some standardization, there is also considerable variability in content and coverage between assessments. All contain some degree of analysis, from an economics perspective, of the past, present and future of aquaculture development and aquaculture research in the region, and a discussion of the state of aquaculture economics research. In general, the latter includes: (i) the type of information available on the economics of various aquaculture systems (i.e., industrial or commercial versus subsistence, intensive versus extensive, inland versus coastal, etc.); (ii) the adequacy and utility of that information in implementing current development approaches, in understanding producer behaviour and in predicting future trends relevant to policy formulation and development planning; and finally (iii) the major research priorities, in terms of both information acquisition and appropriate analysis.

Second, a set of four annotated bibliographies is presented, one for each of the three regions outlined above, together with a General Bibliography containing a set of general references. Each bibliography documents available literature on the economics of aquaculture systems, emphasizing the most recent literature but also including older literature as relevant to the current state of aquaculture. These bibliographies serve both as reference tools, and as the basis for the regional assessments presented in the first part of the report. Indeed, it should be noted that the three regional assessments do not include their own sets of references; instead, all literature cited is referenced in the respective bibliography, unless stated otherwise. Similarly, all references in the remainder of this Introduction are to be found in the General Bibliography, unless stated otherwise.

Since this report is organized largely on regional lines, it is important to clarify what is included and what is excluded from each regional assessment and bibliography. Geographically, the Latin America and Caribbean region is considered to run from Mexico southward, including all Caribbean islands. The Africa and Middle East region includes the continent of Africa and all Middle Eastern countries, from Turkey as far east as Iran. Finally, the Asia and the Pacific region includes all Asian countries from Pakistan eastward (except Japan) and all islands in the western Pacific (except New Zealand and Australia). Note that omission of these three countries in Asia and the Pacific reflects the focus of this report on developing nations. Clearly, an argument could be made to exclude other countries from the group of developing nations (such as South Korea, Taiwan (P.C.), and some colonies), but to maintain completeness this has not been done here. It should also be noted that, for the purposes of this survey, the republics of the former USSR were not included herein.

The regional assessments and the bibliographies attempt to be as comprehensive as possible in covering relevant literature from throughout the developing countries, and in providing full evaluations of the state of aquaculture economics in each region. Unavoidably, however, in any given region, the various countries or sub-regions are not covered to the same extent. While in part this reflects actual differences in aquaculture activity between countries and sub-regions, it also reflects the knowledge base, geographical location and available contacts of those writing and compiling the material. Differences are also apparent between regions, again due in part to real variations in aquaculture activity, but also due to differences in the format, style and coverage of the bibliographies and the regional assessments between regions. The latter arises due to the decentralized nature of the project team, with different participants responsible for each of the geographical regions (as noted by the authorship of each assessment).

2. THE ANNOTATED BIBLIOGRAPHIES OF AQUACULTURE ECONOMICS

The bulk of this report is comprised of the four annotated bibliographies. As noted above, the three largest are geographically-based, presenting literature for each of the developing regions: Africa and the Middle East, Latin America and the Caribbean, Asia and the Pacific.

Some explanation is in order regarding the General Bibliography. This contains references on aquaculture economics that lack a specific regional focus, that cross regions, that transcend regions (dealing with the developing world as a whole), or are of such a broad scope (e.g., textbooks and other bibliographies) that, while not specifically covering developing countries, provide important background material. The following section describes the principal components of the General Bibliography, and includes some examples of corresponding references (drawn from among entries in the bibliography, where bibliographic details may be found).

Aquaculture bibliographies: e.g., Baron and Lewis (1996), Coche (1983, 1990, 1991), FAO (1979), Flood (1991), Garruccio (1995), Merrikin (1989), Szpakowska (1984), Turnbull (1981), Vondruska (1976).

Books and major reports on aquaculture economics: e.g., FAO (1982), Hatch and Kinnucan (1993), IDRC and ICLARM (1982), Jolly and Clonts (1993), Shang (1981, 1990), Shaw (1986), Williams (1983).

Books on aquaculture, with substantial economics content: e.g., Blakely and Hrusa (1989), Brown (1983), Chaston (1983), Lee and Wickins (1991), Meade (1989), Molnar et al. (1996), Nash (1995), Pillay (1977, 1990, 1992), Smith and Peterson (1982).

International studies on aquaculture, with substantial economics content: e.g., Edwards et al. (1988), Edwards et al. (1991), FAO (1984), Nash (1987), Nash et al. (1987).

Publications on aquaculture economics in developing countries generally, not geographically specific: e.g., Ben-Yami (1986), Huang (1990), Huisman (1990), Pollnac (1978), Pollnac and Weeks (1992), Pomeroy (1990), Ruddle (1993), Schmidt (1982), Shang (1982, 1985, 1986), Shepherd (1974), Smith (1982), Street and Sullivan (1985), Turnbull (1990), Weeks (1990).

It should be noted that only a small selection of the many publications not focusing on developing countries has been included in the General Bibliography. In particular, no attempt has been made to be comprehensive in the coverage of publications from ‘Northern’ countries. Thus, the selection of such material in the General Bibliography should be viewed as a sample, rather than as a complete set of relevant works.

In total, 1 154 references are included in the bibliographies, as follows:

General Bibliography: 77 references

Africa and the Middle East: 223 references

Latin America and the Caribbean: 133 references

Asia and the Pacific: 721 references

Each reference provides, if available, three pieces of information, described below.

(i) Bibliographic data are provided first, including author name (s), date of publication, title and source (e.g., publisher, journal name, discussion paper series, etc.).

(ii) The first author’s mailing address at the time of publication is given in square brackets, in the form [institution, city, country] if available; note that since the address is that given in the publication itself, it may or may not be accurate at present.

(iii) A summary of the publication is then provided. In many cases this is the full abstract, or a part thereof. Alternatively, it may be drawn from an executive summary or from the actual text of the publication, or it may be written entirely by the compilers of that bibliography. Note that in some cases, it was not possible to physically locate the publication, and no abstract was available, but it was felt worthwhile to include the publication herein; in such situations, only the bibliographic information is provided.

Each bibliography is arranged in alphabetical order (by surname of the first author), with entries numbered consecutively. These numbers are used in the indexes (which follow the set of bibliographies) to refer to the respective entries. For example, if one sees the number 54 listed in any Asia-Pacific index, this refers to the 54thth entry in the Asia and the Pacific Bibliography.

Bibliographies are each indexed according to country, aquatic species, production environment and subject areas. The indexes provided for each region are as follows:

Entries in the bibliography are assigned to one or more of eight possible subject areas. These range from standard subjects in aquaculture economics (microe-conomics and production economics, market analysis, macro-economics and socio-economics) through to newer, less-studied or more specialized topics (e.g., household economics, environmental economics, analysis of technology transfer), with an additional subject heading providing a focus on the assessment of information and research needs in aquaculture economics. These subject areas are elaborated upon later in this Introduction.

It should be noted that while most entries in the General Bibliography are not specific to any one region or country, some do contain substantial coverage of individual countries. In such cases, these entries have been noted in the index for the relevant country. The format used can best be stated by example; if the 47thth entry in the general bibliography refers in some detail to Morocco, then the notation ‘47(G)’ is appended to the country index for Morocco (which otherwise lists relevant references contained in the Africa and Middle East Bibliography). In other words, the presence of ‘(G)’ following a number in any country index refers the reader to the General Bibliography.

Finally, a caveat is in order. While over 1 100 references are included in the bibliography herein, limitations on the time span of this project, together with the inherent difficulties in locating grey literature, have meant that undoubtedly many other relevant references did not come to the attention of the authors, and thus were not included. Similarly, although efforts were made to access material in a wide variety of languages, this was not always possible, and a considerable number of publications must have been missed as a result. We apologize for these omissions. We hope that this report will nevertheless be of value, and that it will be possible to provide an update at some future occasion. Accordingly, the report’s first author, A.T. Charles, would appreciate receiving a copy of any relevant publication not included herein.

3. AQUACULTURE ECONOMICS SUBJECT AREAS

3.1 Micro-economics and production economics

Micro-economics and production economics is the most common form of economic analysis in aquaculture. The focus lies on the fish farm itself (the ‘firm’ in generic economics jargon) and its production processes, particularly its balance sheet (costs, revenues, profit level, etc.), indicators of efficiency (through marginal analysis), and use of and substitutability among factors of production, etc. Most analysis is descriptive (what is the current situation?), while some is normative (what is the best level of production? ).

3.2 Household economics

Just as ecologists highlight the interactions between components of the ecosystem, so too should economists focus on interactions between components of the economy. In a rural environment, and particularly in integrated farming practices, it would be inaccurate to examine aquaculture in isolation from other sources of livelihood. The behaviour and actions of the fish farmer, as an economic player, can only be understood in conjunction with that farmer’s other (non-aquaculture) activities. At the same time, it is important to understand the role of households not only as multi-faceted producers but also as consumers. Thus, references within this subject area deal with the contribution of rural aquaculture to household economies (in the case of smallholder fish farmers and subsistence farmers) and the interaction with the non-aquaculture economic activities of farmers, as well as the household’s food/protein requirements and actual consumption levels.

3.3 Socio-economics

Socio-economics lies on the border between economics and other social sciences. As noted elsewhere (Charles et al., 1994), this field can be seen as integrating social and institutional studies into conventional economic analysis, or alternatively as bringing the concepts and analytical methods of economics into social science research. Among the themes covered within this subject area are: multiple objectives; income distribution; property rights and tenure; labour market dynamics and mobility; the role of social and opportunity costs; gender issues; and the behaviour of fishermen and fishing communities. (For a detailed discussion of these themes, see: Charles, A.T. 1988. Fishery socio-economics: a survey. Land Economics 64:276-295.)

3.4 Market analysis

A wide range of research has been carried out, particularly in recent years, dealing with various aspects of markets for aquaculture production, and indeed aquatic production more generally. Themes included under this heading include distribution and marketing of aquaculture production, accessibility of aquaculture products to consumers, trends in prices and consumer preferences, price and income elasticities of demand, and the like. Such research is particularly important in connection with efforts to increase aquaculture production in specific countries or regions. For example, efforts to increase local protein availability through commercial fish farming may be thwarted if the absence of local purchasing power for relatively high-priced aquaculture output makes an apparently viable endeavour unprofitable. Development of an export-oriented aquaculture industry may fail if market research does not locate a suitable ‘niche’ for the new production.

3.5 Macro-economics

A major component of the literature on aquaculture focuses on developmental matters: How has aquaculture developed in particular regions? How does aquaculture fit into the development process? Conversely, what are the effects of the national economic environment on aquaculture development? What interactions are there between aquaculture activity and the regional and/or national economy? These discussions are placed under the heading ‘macro-economics’, since such questions arise not at the ‘micro’ level of individual farmers, but rather at the ‘macro’ (regional or national) level. (For example, it is a common concern that export-oriented production systems can be profitable at the micro-farm level, but have little benefit at the macro-national level, once environmental and social externalities are taken into account.) Some of this discussion is inherently focused on economic concerns, while another part is indirectly connected with economics. In this vein, also included under this heading is the macro issue of the role aquaculture can or could play in national food production.

3.6 Environmental economics

It is becoming increasingly important to examine the environmental impacts, and the impacts on sustainability, of all economic activities. This is certainly the case with commercial/industrial aquaculture, which has raised widespread environmental concerns over loss of agricultural land (e.g., to shrimp farming), the spread of disease (e.g., by salmon farming) and various forms of aquatic pollution. References classified under the environmental economics heading deal with this range of issues, from an economics perspective.

3.7 Socio-economic aspects of technology transfer

While economic analysis of existing aquaculture activities typically deals with the above subject areas (particularly micro- and macro-economics and market analysis), it is also useful to carry out economic studies of the process of aquaculture development itself, notably the process by which aquaculture knowledge and technology are (or are not) transferred and adopted. This subject heading deals, therefore, with the relatively small set of studies located that compile and examine information on the economic and social suitability of transferred technology in aquaculture.

3.8 Information and research assessment

Finally, those involved in development planning, research administration and related fields may be interested in publications that examine (as do the regional assessments in this report) the need for and the nature of economic information in aquaculture, the current state of economic knowledge on various aquaculture subjects, and the requirements for further economic research in the area. Such material is most often published in the grey literature of governmental and institutional reports, rather than in primary journals. References collected under this subject heading provide a set of such studies.

REFERENCES

Statistical Data

FAO Fishery Information, Data and Statistics Unit. 1995a. Aquaculture production statistics 1984-1993.

FAO Fisheries Circular 815, Revision 7. Rome, FAO. 186 p.

FAO Inland Water Resources and Aquaculture Service, Fishery Resources Division. 1995b. Review of the state of world fishery resources: aquaculture. FAO Fisheries Circular 886. Rome, FAO. 127 p.

FAO Fishery Information, Data and Statistics Unit. 1997a. Aquaculture production statistics 1986-1995. FAO Fisheries Circular 815, Revision 9. Rome, FAO. 195 p.

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