4. Production, marketing and economics

4.1 Production

4.1.1 Total aquaculture production in recent years

Aquaculture developed slowly during the 1960s and for the most part of the 1970s. The proportion of aquaculture production in the total fisheries production was only 22.7 percent in 1958, and increased gradually to 23.7 percent in 1968 and 26.0 percent in 1978. Since 1978, due to the establishment of appropriate principles and policies, as well as the introduction of the contract responsibility system in the countryside, aquaculture has grown at an unprecedented rate. In 1988, aquaculture production reached 6.74 million mt, a rise of 5.53 million mt as compared with 1978. During this period (1988), for the first time aquaculture production was higher than that of capture fisheries.

In 1994, the production of aquaculture was 11.35 million mt, a rise of 10.14 million mt over that of 1978, or an average annual increase of 633,800 mt. Aquaculture production consisted of inland aquaculture, 7.89 million mt, accounting for 69.55 percent; and marine aquaculture, 3.45 million mt, accounting for 30.45 percent. In inland aquaculture production, pond culture totalled 5.96 million mt, accounting for 75.5 percent; lake, 476,272 mt (6.1 percent); rivers and ditches, 387,002 mt (4.9 percent); reservoir, 656,836 mt (8.4 percent); paddy fields 206,915 mt (2.6 percent) and others, 200,606 mt (2.5 percent) (Tables 8a-8b).

Table 8a. Inland aquaculture production by environment. 1979-1994 (volume in mt)

Marine aquaculture production including finfish was 101,110 mt accounting for 2.9 percent; crustaceans, 92 014 mt (2.7 percent); molluscs, 2.52 million mt (72.9 percent); seaweeds, 730 063 mt (21.2 percent) and others 10 056 mt (0.3 percent) (Table 9a, 9b).

Table 8b. Inland aquaculture area by environment (1979-1994) (area in ‘000 ha)

Table 9a. Mariculture production by major species (1983-1994) (volume in mt)

Table 9b. Mariculture area by major species (1983-1994) (area in ‘000 ha)

4.1.2 Production per unit area

Besides some intensive culture practices such as netcage culture, river eel culture and shrimp culture, the country's aquaculture is largely semi-intensive and extensive culture, which results in a comparatively low production per unit area. Progress made in fisheries education, scientific research, technology improvement and proper dissemination through training and extension services, has led to the gradual increase in production. In freshwater aquaculture, the average production of 258 kg/ha in 1979 increased to 1,728 kg/ha in 1994, a rise in average production per ha by 6 times. In mariculture, substantial increase in production per unit areas has also been recorded.

4.1.3 Production trends, short and long term

a. Fisheries production target for the year 2000 is 28.50 million mt, of which 60 percent will be contributed by aquaculture, so an all-round fast growth of aquaculture is anticipated.

• During the next five years (1996-2000) aquaculture production will increase from about 12.7 million mt (1995) to about 17 million mt (2000), or an average annual rise of about 0.86 million mt or 6.7 percent.

• Pond fish culture will still be the main activity of freshwater aquaculture and will contribute a great part of the increment to aquaculture output. Old ponds will be renovated, to increase the production per unit area.

• Lake and reservoir culture will play an important role in further development. The high yield technology of pond culture will be applied to lake and reservoir culture. Stocking programmes will become a part of culture activities.

• Paddy field fish culture will benefit both rice and fish. Several methods are being used, such as stocking fingerling directly in paddy fields, digging ditches in paddy field for fish culture, etc. More than ten species have been cultured, and more species and methods will be adopted. Paddy field fish culture cum vegetable, wheat, lotus, duck weeds, asparagus is something new in Chinese aquaculture.

• Shrimp culture has achieved great success in the 1980s, but suffered severely by the break-out of shrimp diseases in 1991, 1992 and 1993. Culture area remains more or less the same as in 1994. Serious effort has been directed towards disease prevention and treatment. Shrimp culture will be rehabilitated and expanded in the next five years.

• Mollusc culture will continue to expand. Some non-traditional species such as Japanese scallop appears to have high commercial potential, and a fast growing abalone production is anticipated.

• Two main species, kelp and laver, are cultured at present. Seaweed culture will be further expanded owing to the improvement of processing technology of small package, which has reached export standards and fits the needs of domestic consumers today. Besides, culture of Undaria pinnatifida, Shihuacai (Gelidium amansii), and Jiangli (Gracilaria gigas) will also rapidly develop.

• The highly profitable marine finfish culture (grouper, bream, seabass and others) in netcage in coastal areas is expected to further expand.

b. There is still much room for the expansion of culture area for a period of time, especially in newly tapped regions, low-lying land of no value and saline-alkali land of little value, vast paddy fields, mudflats and shallow water area along the coast.

• In the short run aquaculture development will still rely on expanding culture area on the one hand and increasing production per unit area on the other. But in the long run, due to competition for land and water, expansion will be limited to increasing production per unit area.

• Therefore, the government stresses that every effort be exerted to increase production per unit area through technology improvement and dissemination. On the whole, the extensive culture system will be gradually shifted to semi-intensive and intensive culture systems.

c. To seek culture systems and culture species of high input, high yield, high quality and high profit is the trend in culture activities.

• More and more new species will be introduced and transplanted.

• Culture of more valuable species such as abalone, crab, soft shell turtle, sea cucumber, and scallop, will grow faster than ever before.

4.2 Marketing

4.2.1 How and where

Before 1979, under the highly centralised planned economic system, all the fisheries products were sold to State-owned trading companies at government fixed and controlled prices. At that time, the domestic market was controlled by the China National Fisheries Corporation which coordinated national trade. Provinces and cities set up provincial and municipal fisheries supply and marketing companies to control their own business of purchase, selling, storage, transportation, processing and the like. Many branches of these companies all over the country purchased fisheries products from producers and then distributed to consumers through their retail shops. At the same time they supplied goods and services to fishermen. Government-controlled prices could not reflect the actual value of the products in most cases, or sometimes were lower than production cost, so there was no reward for increasing production and as a result fisheries products were in short supply at the market.

In 1979, the government readjusted its policy to a quota system under which a producer must sell at fixed prices a set quantity of goods to the government; any excess over their quotas could be sold at negotiated prices under a free market economy.

In 1985, the seller quota system was abolished and the prices of fisheries products were regulated by the market. The government nowadays encourages State, collectives and private enterprises and individuals to participate in fisheries production and trading activities. This has resulted in higher production and better quality of products.

4.2.2 Marketing channels

Supply and marketing in the past was monopolised by one State enterprise. The government has now adopted a trade policy that allows the State, collectives and the individual to participate freely. This has intensified competition among them. In 1993, the amount traded by State-owned fisheries companies made up 12 percent of the total, the collective and cooperative companies accounted for 23 percent; individuals 40 percent and that traded directly by fishfarms, 25 percent.

Bulk sale goes like this: fish producers--wholesale organisation in production areas--wholesale companies in marketing areas--retailers--consumers. Each dealer in the above link gets a 10-20 percent profit, and the price paid by consumers may be double than that at farmgate.

Under the country's economic reform, management systems have been completely reconstructed. The former market organisations and trading regulations have been broken down and replaced by trading activities which are not well organised. Traders and peddlers conduct business in any place if possible, such as on board boats or vessels, wharves, ports, fishponds and beaches. Therefore the development of wholesale markets has become one of the top priorities at present.

4.2.3 Local and distant markets

Traditional inland aquaculture, mainly pond fish culture, basically is self-sustaining. Most are small ponds located far from the consumers. Most of the cultured fish is for family consumption and the rest sold in township free markets near their homes. The large-scale fishfarms and fish production bases are usually concentrated in the suburbs and these deliver their products to cities on a regular basis. The price of live fish is much higher than other forms.

The flow of fisheries products is directed by market prices, so that distant markets are also very active. Many high-value species are even delivered by air to five-star hotels and restaurants.

4.2.4 Export market

In the past, the export and import of fisheries products were controlled by the China Cereals and Foodstuffs Import and Export Corporation and its branches. Today, a number of production and trade enterprises have been permitted to run their own import and export business under the quota system. In 1992, the amount of fisheries exports to Japan, the United States and Hong Kong, and their value accounted for 87.7 percent and 89.2 percent of the total respectively. Exports to Korea and Taiwan have rapidly increased. Shrimp and live fish are the main aquaculture export products while seaweeds are mainly exported to Japan.

4.2.5 Transportation to market

All transportation means are used to bring the products to the market, such as rail, land vehicle, motorcycle, bicycle and aircraft. Live fish are transported to Hong Kong daily by fishing boats equipped with pumps and running water tanks. An efficient live fish vehicle has been developed recently for distant transportation.

4.3 Economics

4.3.1 Inland aquaculture

a. Pond fish culture

A 1990 survey of 9,703 ha State-owned freshwater fishponds in 62 counties of 14 provinces showed that fish yield per ha was 3,297 kg with an output value of 13,036 yuan; production cost was 9,806 yuan. After deducting 3.5 percent tax from the total production value, net profit was 2,776 yuan/ha. Labour amounted to 366 mandays/ha with average output at 8.5 kg/day. For every 100 yuan output value, production cost was 75.2 yuan.. Fish was sold at price 3.95 yuan/kg on average.

In the same year, a survey of 789 ha collective and privately-owned freshwater fishponds in 48 counties of 10 provinces showed a production of 4,172 kg/ha, valued at 19,899 yuan. Compared with the earlier case of State-owned fishponds, the increase in production was 43 percent and in value of production 53 percent. The production cost was 15,261 yuan/ha. Net profit was 4,085 yuan/ha after taxes, 47.2 percent higher than the State-owned fishponds. Labour comprised 466 mandays/ha, average yield 10.1 kg/day with a net production value of 14.46 yuan/day. Production cost for every 100 yuan of output value was 76.69 yuan. Fish was sold at a price of 4.22 yuan/kg, 6.9 percent higher than that of State-owned fishponds. This shows that production efficiency and productivity of collective-owned and private fishponds are higher than that of State-owned fish ponds.

b. Lake fish culture

The 1994 survey of 2,018 ha lake culture areas showed total production at 2,171 mt (1,077 kg/ha), with output value of 9.09 million yuan. Production cost was 5.22 million yuan and net income was 2.28 million yuan (4 081 yuan/person).

4.3.2 Mariculture

The survey on unit cost of mariculture showed the following:

• Raft abalone culture - production cycle: 2 years, total production cost: 115,075 yuan/mu, output: 1.1 mt/mu and the selling price: 300,000 yuan/mt.

• Bottom culture of abalone - production cycle: 2 years, the total production cost: 4,642.7 yuan/mu, output: 40 kg/mu and selling price: 300 yuan/kg.

• Chinese scallop culture - production cycle: 2 years, total production cost: 2,700 yuan/mu, output: 2 mt/mu and selling price: 2,000 yuan/mt.

• Blood clam culture - production cycle: 2 years, total production cost: 3,575 yuan/mu, output: 1.5 mt and selling price: 8,000 yuan/mt.

• Raft oyster culture - production cycle: 2 years, total production cost: 4,012 yuan/mu, output: 5 mt/mu and selling price: 2,000 yuan/mt.

• Mudflat wooden pole oyster culture - production cycle: 2-3 years, total production cost: 525 yuan/mu, output: 2 mt/mu and selling price: 2,000 yuan/mt.

• Hard clam culture - production cycle: 2-3 years, total production cost: 63.3/mu, output: 2 mt/mu and selling price: 4,000 yuan/mt.

• Razor clam culture - production cycle: 2 years, total production cost: 350 yuan/mu, output: 0.5 mt/mu and selling price: 8,000 yuan/mt.

• Blood cockles culture - production cycle: 2 years, total production cost: 470 yuan/mu, output: 250 kg/mu and selling price: 8 yuan/kg.

• Undaria culture - production cycle: 1 year, total production cost: 1,722.5 yuan/mu, output: salted undaria 1 mt/mu and selling price: 5,000 yuan/mt.

• Laver culture - production cycle: 1 year, total production cost: 1,115 yuan/mu, output: 250 kg/mu and selling price: 20 yuan/kg.

• Kelp culture - production cycle: 2 years, total production cost: 3,475 yuan/mu, output: salted kelp 4 mt/mu and selling price: 3,000 yuan/mt.