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2. AQUACULTURE SECTOR OVERVIEW

2.1 Contribution of aquaculture to the fishery sector

The fishery sector has three major sub-sectors. These are the commercial (fishing in waters more than 7 fathoms deep by boats of more than 3 GTs), municipal (fishing boats 3 GTs or less and using gears not requiring the use of boats) and aquacultural (farming of fish or other aquatic organisms) sectors. The aquaculture sub-sector also has three major components - brackish-water aquaculture, freshwater aquaculture and mariculture. Despite the long tradition of aquaculture (coastal fish ponds date to the 15th century), aquaculture expanded rapidly and diversified its production only in the 1980s (Rabanal, 1995). For a long time, coastal brackish-water fish ponds dominated the country's main aquacultural activities. At present, the Philippines has a developed freshwater fish culture in ponds, mollusc culture (mainly oyster and mussel), finfish cage and pen culture and mariculture of seaweeds.

Aquaculture is an important sector of the fishery industry of the country as shown in its ten-year average production from 1979-88 and 1989-98 (Table 1). On average, the substantial increase of fisheries production from 1 978 214 t in 1979-88 to 2 656 408 t in 1989-98 came mainly from aquaculture rather than from the commercial and municipal fisheries. Average aquaculture production grew considerably from 431 133 t in 1979-88 to 820 946 t in 1989-98, whereas average commercial fisheries production expanded only slightly from 529 232 t to 818 356 t during the same periods. Consequently, the annual rate of growth in aquacultural production (6.83%) was higher than growth rates in commercial (3.97%) and municipal (-0.08%) fisheries from 1979-1998. In fact, municipal fisheries have declined 2.95% annually over the past ten years. The percentage of aquaculture contribution to total fishery production increased, on average, from 21.79% in 1979-88 to 30.90% in 1989-98. The share of municipal fisheries declined from 51.45% to 38.29% for the same period. In the past ten years, the contribution of aquaculture to fisheries production was comparable to that of commercial fisheries total production. Similar trends are observed for the shares of aquaculture, commercial and municipal fisheries to the total value of fisheries production.

2.2 Performance of production systems

Production from the aquaculture sector comes primarily from fish ponds (freshwater and brackish-water), fish cages and fish pens (freshwater and marine water) and mariculture (Table 2). It is interesting to note that, other than mariculture, freshwater fish ponds and freshwater fish cages are the major sources of growth of aquacultural production. From a ten-year average production of only 14 155 t annually from 1979-88, the yield from freshwater fish ponds reached 41 708 t annually from 1989-98, an increase of 194.64%. The increase in production from freshwater fish-cages was also substantial, totalling 30 450 t in 1989-98, equivalent to a 293.87% increase over the 1979-88 output-level. Conversely, the output from fish pens decreased by 45.77% over the same periods. Production in brackish water fish ponds increased modestly by 26.18%. However, an examination of yearly production revealed a declining trend after a peak in 1991 and a slow recovery in 1998. Overall, the ten-year average aquaculture output increased considerably from 431 133 t in 1979-88 to 820 946 t in 1989-98, an increase of 90.42% over these periods.

The substantial expansion in aquaculture production is an indication that the sector could be a major player in augmenting the supply of fish protein for consumption and a major source of income for farmers and for foreign earnings. This also supports an earlier observation that freshwater aquaculture would become a major source of growth for the sector. Given the proper environment for growth, the country can still accelerate the expansion and development of its aquaculture industry (Rabanal, 1995). The country has large natural resources to support aquacultural development: freshwater (106 328 ha) and brackish-water (232 065 ha) swampland, existing freshwater (14 531 ha) and brackish-water (239 323 ha) fish ponds, lakes (200 000 ha), rivers (31 ha), and reservoirs (19 000 ha).

2.3 Production performance of major aquaculture species

Although prawn, milkfish, tilapia and seaweeds are the country's major aquacultural products comprising about 95% of total aquaculture production, only the production performance of milkfish, prawns, tilapia and carps was considered relevant to this study. The quarterly and yearly production data for these aquacultural products from 1993-97 are presented in Table 3.

Due to declining export demand for prawns and recent disease outbreak, prawn production declined 16.99% annually from 1993 to 1997. In contrast, milkfish production showed signs of recovery in 1997 and posted a modest annual growth rate of 0.91% during the same period. The reversal in the trend of milkfish production could be attributed to farmers' improved access to fry and fingerlings. Recently, fry and fingerling production greatly increased in the country due to the entry of multinational companies into milkfish hatchery production. Previously, the shortage of seeds greatly limited the expansion of milkfish production (Dey and Bimbao, 1995). Also, shortage of inputs, frequent typhoons and flooding, acid sulphate soils, extreme tidal fluctuations, inadequate credit and deficient post-harvest facilities are other problems milkfish producers face.

Tilapia was a major source of growth for the aquaculture industry in the Philippines from 1983-95 (Dey and Bimbao, 1995). Farmed tilapia production increased substantially from 31 000 t in 1983 to 81 000 t in 1995, a growth rate of 8.7% yearly. In recent years (1993-1997), however, tilapia production declined 2.25% yearly. This decline can be considered a temporary setback to the tilapia industry, as production increased to its previous levels of over 90 000 t in 1997.

Among the aquaculture products available to consumers, carp species can be considered a newcomer. Due to the limited production of carps, output statistics for the species are combined with those of others. Thus, the production performance of carps in the country is difficult to analyse. In recent years however, the Bureau of Agricultural Statistics (BAS; Department of Agriculture), with a mandate to generate fishery statistics, has started to track the production of carp species. In 1993, the production of carps was estimated to be only 80 t but substantially increased to 1 865 t in 1997. With a yearly growth rate in production of 55.46% from 1993-97, the carp species has the potential to become a major species in fish culture in the near future. Currently, anecdotal data show that carp species are popular only in the Cordillera and Bicol regions of the country. Among freshwater fish in the Cordillera area, carp species are preferred because they grow well in this region due to a favourable climate. Carp are popular in Bicol, as they suit the cooking and preparation styles of the peoples in this region. The market for whole carp can be developed by using effective marketing techniques or by converting the fish to other forms for consumption. The Bureau of Fisheries and Aquatic Resources (BFAR) has successfully used bighead carps as raw material for artificial crab legs, a surimi product that is popular in sushi bars (Yap, 1997).

The quarterly seasonal indices (1993-97) of production of aquaculture species are shown in Table 4. Production of prawns and milkfish peaked in the fourth quarter, while production of tilapia and carp species peaked in the second quarter of the year. These results are expected, as demands for prawns/milkfish and tilapia/carp usually peak in the fourth and second quarter of the year, respectively. Demand for high-priced prawns and milkfish exceeds demand for others aquacultural products in the fourth quarter of the year during the festive season. On the other hand, farmers raising tilapia and carps time their productions to coincide with the relatively high demand for fish in the second quarter of the year, as prices for these fishes are usually highest at that time. In the second quarter, most consumers observe a self-imposed prohibition on the consumption of animal flesh, except fish, in observance of Holy Week.

The quarterly and yearly productions of fishery products from 1993-97 of cultured (fish ponds, fish cages and fish pens) and natural (freshwater and brackish water) species are presented in Tables 5-8. Prawns, milkfish and tilapia are reared in brackish-water fish ponds. Only milkfish production posted positive growth rates (Table 5) per annum. Although milkfish production grew only 3.62% a year, the positive growth indicates that output of milkfish is on the road to recovery, in contrast to prawn and tilapia productions, which declined 16.99% and 12.95%, respectively, each year. The production of prawns in 1997 was less than 50% of its 1993 level and recovery could take some considerable time. Prawns are reared in brackish-water fish ponds, which are not suitable for tilapia. Experts believe that the shrimp culture industry collapsed because of pollution from the automobile industry (Yap, 1997). Habitat deterioration is inevitable with the sky-rocketing values of real estate and a growing population, as investors want to maximize returns on assets. Despite the downtrend in tilapia production from brackish-water fish ponds, the tilapia industry shows signs of recovery. Its total output started to increase in 1997, as discussed earlier. Tilapia production from brackish-water fish ponds is only about 5% of total aquaculture production. Advances in brackish-water fish pond production in the near future will most likely come from culturing milkfish, unless a suitable tilapia strain can be developed for brackish water.

Only output statistics for milkfish, tilapia and carps species are available for freshwater fish ponds (Table 6). In fact, recording of the production of milkfish in freshwater fish ponds began only in 1997. These numbers show that milkfish is not yet widely cultured in freshwater fish ponds compared to tilapia and carps species, perhaps because production technologies for milkfish exist mainly for brackish-water habitats. Consequently, tilapia and carps species dominate freshwater production in fish ponds. However, since farmers prefer tilapia to carp species for culture in freshwater ponds, the culturing of carps in freshwater ponds was less than 1% of total tilapia production. Nevertheless, from 1993-97, output of carps increased substantially at a yearly rate of 41.10%, whereas the rate of growth for tilapia decreased 3.79% yearly for the same period. With current efforts by the government and with strong private support for the promotion of tilapia farming in the country, tilapia is expected to continue to dominate production in freshwater fish ponds. Despite tilapia's popularity, Chinese carps, for example, deserve a second look, because they have immense potential for culture and require only natural food (Yap, 1997).

Milkfish, tilapia and carps are the major aquaculture species cultured in freshwater fish pens in the country. Milkfish dominates production in this culture system (Table 7). In 1997, milkfish production reached 14 168 t, while tilapia and carp productions only amounted to 4 272 t and 1 510 t, respectively. However, yearly output of milkfish declined substantially by 19.46%. Considering that milkfish production had reached 24 455 t in 1993, it will take some time to restore earlier levels of production. Tilapia's performance displayed a similar trend as milkfish's, yet the production of carps contrasts sharply with that of those two species. Output of carps rose tremendously from a mere 8 t in 1993 to 1 510 t in 1997, posting a yearly growth rate of 96.09%. Nevertheless, production levels in 1997 were much lower than those in 1994. As shown in Table 7, output of milkfish, tilapia and carp species peaked in 1994 at 25 324 t, 9 779 t and 4 177 t, respectively. Reduced production of these species after 1994 can be attributed mainly to government efforts to curtail the proliferation of illegal fish pens in various lakes.

Only two species, tilapia and carps, are commonly cultured in freshwater fish cages in the Philippines. As expected, tilapias were more popular among farmers in this culture system than were carps. Production of carps was less than 1% of tilapia production in this system. The bulk of the tilapias, about 46% of total tilapia output in 1997, came from freshwater fish cage culture. Tilapia production registered a positive yearly growth rate only under this culture system. Although tilapia production grew 3.27% per annum from 1993 to 1997, we registered a substantial advance in recent years. Hence, with policies in place that promote growth and development, tilapia production in freshwater fish cages could increase substantially in the near future and continue to fulfil, in part, the demand for fish in the country.

2.4 Mode of aquaculture operation, ownership and farm size

Culture of fish in brackish-water and freshwater fish ponds, cages and pens are the major aquaculture systems in the Philippines. Most of these systems are owner-operated as stand-alone operations, with family members assisting in the business. Large-scale operators, who rely heavily on farm managers or caretakers, run other systems. Except for freshwater fish ponds, none of the aquaculture systems can be integrated with other farming activities (Yap, 1999). However, other aquaculture systems can be integrated with activities of fishing communities. Integration may result in a reduction of coastal families' fishing efforts, which could be easily compensated for by earnings from aquaculture. Thus, aquaculture could become a source of income to meet basic necessities and may also improve recruitment of juveniles to sustain future fish catches by reducing the fishing pressure on existing stocks.

In the late 1970s, we saw an attempt to integrate fish culture with rice farming as a means to increase farmers' income and to expand areas of production, particularly of freshwater aquaculture. However, to date, no data exist to verify successful integration of fish culture with rice farming at a sustainable level. Thus, cultivating fish is considered a separate activity from farming rice. Wastewater from fish ponds could be used for irrigating rice fields, and the problem of undersized fish at rice-harvest could be avoided, since rice and fish cultures would be run as independent operations. Furthermore, this type of culture would allow the planting of other crops, such as vegetables, instead of being restricted to only rice. Some species of fish can be fed with terrestrial plants. Both tilapia and grass carp accept napier, a forage crop, as feed (Yap, 1999).

Private ownership is common in aquaculture systems in the Philippines. The government usually owns hatchery operations, i.e. the production of fry and fingerlings, to supply grow-out operators with needed fish stock. In other words, the government only provides necessary support to fish producers but is not involved in producing aquatic products, which would compete with farmers' outputs. This could explain the rapid growth of the aquaculture industry in the country, as the government encourages active participation of the private sector in the industry. Recently, big corporations and private companies have started commercial aquaculture operations. With the widening gap between fish supply and demand, the emergence of commercial operations has not yet negatively affected the profitability of backyard operators. It is conceivable that large operations might reduce the gap between supply and demand for the benefit of consumers, as more products from aquaculture become available in the market.

A recent study on freshwater aquaculture revealed that the average land holding of tilapia farmers was about 3.53 ha (Regaspi et al., 1997). An operator of a tilapia fish pond has a total aggregate land holding of 4.91 ha, while a farmer engaged in cage-culture has 1.93 ha. The size of land holdings of small-scale farmers of tilapia ponds (1.36 ha) differs substantially from those of large-scale (8.38 ha) pond operators, as does the size of land holdings of small- (0.65 ha) and large-scale cage operators (1.93 ha). Only few farmers are engaged in tilapia operations of commercial scale, i.e. in operations larger than 3 ha. Most tilapia fish pond ventures are considered 'backyard' operations; they cover less than 1 ha. Regardless of classification, most of the fish pond farmers practised semi-intensive farming, using mainly inputs available on-farm, with low density of stock and less commercial feed. Although smaller areas were used for tilapia cage-culture than for fish ponds, most of the cultures were operated intensively, i.e. farmers depended heavily on commercial feeds and high density of stock. Most tilapia cage-cultures are commercial-scale operations. Regardless of the scale of the farm, a high proportion of the tilapia production from either pond- or cage-culture is sold in the market, rather than consumed by fish farming families themselves. Usually, commercial-scale farmers market their products mainly in urban areas, whereas those of backyard-scale sell their products primarily in rural areas.

2.5 Objectives of fish farmers

Aquaculture requires a relatively high investment of capital (NEDA and ADB, 1992). Therefore, it is not surprising that profit is the driving force behind land-based (fish ponds) or lake-based (fish cages and pens) aquaculture activities, regardless of farm size. Historically, aquaculture in the country started as backyard operations. Families consumed what they produced, especially in areas with less access to animal protein as a means of supplementing their requirements for protein. Despite the limited scale of operations, families in aquaculture found markets for their products. Neighbours were their first customers. Acceptance of their products improved, and markets widened into communities. More markets developed, both in rural and urban areas, offering considerable incentives for early producers to expand operations. With growing markets and despite more producers entering the business of aquaculture, a major switch took place in the primary objectives of fish farmers. Today, more products are produced for sale in markets and fewer are reserved for household consumption. Clearly, profit motivates those engaged in aquaculture. A recent assessment of the freshwater aquaculture industry in the country (ICLARM, 1998), particularly of tilapia farming, found it to be a highly lucrative business, as it generates substantial profits for fish farmers who operate either fish ponds or fish cages.


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