Aquaculture is one of few sub-sectors within agriculture whose continued growth has been keeping pace with overall economic expansion. By the year 2000, China is likely to be the largest aquatic producer in the world. The rapid growth of aquaculture has been fuelled by area expansion and rising productivity. Technological changes, both in marine and freshwater aquaculture, 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 yield over the past two decades. Among these factors, technological change has been the primary engine for growth in aquaculture since the 1980s. Advances in this sector stimulate adjustments in agriculture, create employment for rural farmers and increase farmers' incomes.
However, there is growing concern about the rapid area-expansion for aquaculture and its competition for land-use with crop production, particularly grain production. Most recent studies show that, while China will not starve the world, its grain imports will rise as income grows and as China joins the WTO in the near future. Grain-security constitutes a central strategy of China's agricultural policy. If it remains effective in the future, expansion of aquaculture will be limited. The growth of aquaculture will largely depend on increased productivity and technological development in the sector.
We expect a rapid rise in demand for aquatic products in the future as China's economy continues to grow strongly and the urban sector expands. Income elasticity of demand for aquatic products is one of the highest among various food commodities. Doubled income would imply more than doubled demand for aquatic products for a population of more than 1.2 billion in 1998, reaching 1.6 billion by 2030. Whether China's demand for aquatic products will outstrip domestic production, and how China will keep its role as one of the major exporters of aquatic products in the world are issues that need further investigation.
It is a fact that technology will stimulate further advances in the sector in years to come. However, the literature yields no study that systematically examines how technologies in the sector are generated, and how these technologies are extended and adopted by farmers.
Potential barriers to the development of aquaculture include the possibility of frequent adjustments of land-tenure policies and insufficient access to financial resources. Farmers, who feel insecure about the use of land and water resources, may opt to use them in an exploitative manner. Investment in infrastructure may be insufficient and long-term productivity may be curtailed. Furthermore, difficulties experienced by individuals in obtaining loans may also negatively affect farmers' investment in aquaculture production.
Our analysis also revealed great viability of the private sector, which constitutes a vital force in the growth of the aquaculture sector. Policies need to be adjusted to better facilitate participation of the private sector, which has demonstrated great efficiency, cost-effectiveness and market responsiveness. Growth in aquaculture has been impeded by the policy of grain self-sufficiency. Gradual relaxation of this policy may lead to more opportunities for expansion in aquaculture in response to growing demand.
Research efforts are needed in several other areas, including sector-wise database development, demand and supply analysis, price and marketing studies, land-tenure reforms and research and development policies. Large inconsistencies in government data for production and consumption of aquatic products make any analysis, based on these official sources, questionable. Little analytical effort is under way to understand the mechanisms of supply, demand and trade in aquaculture. The tremendous growth in aquaculture in the past and its increasing importance to the national economy (food quality, food security, farmers' income, etc.), warrant an urgent call to develop research in this sector to better understand its components. Lessons learnt from experience in aquaculture will not only be important for devising future policies for the sector, but also for broadening existing regulations, as they demonstrate the merit of market reforms and private participation for a healthy economy in general and for social welfare in particular.
