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Economic Analysis of Milkfish Aquaculture in Southern Negros Occidental, Philippines

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Economic Analysis of Milkfish Aquaculture in Southern Negros Occidental, Philippines p-ISSN 2094-4454 RESEARCH ARTICLE Economic Analysis of Milkfish Aquaculture in Southern Negros Occidental, Philippines Geofrey A. Rivera Faculty, College of Business Administration CHMSC Binalbagan Campus Abstract: Given the economic profitability of Milkfish in the 5th District of Negros Occidental, this study on economic analysis of milkfish aquaculture using financial performance; sensitivity analysis; and coping strategies to ascertain sustainability and production, conducted. Information on the profile of the respondents, problems they met and adaptive coping strategies, and other pertinent financial data needed were elicited from the three areas such as Himamaylan, Binalbagan, and Hinigaran using the researcher–made questionnaire. Financial performance was computed and analyzed and subjected to statistical analysis. Results showed that extensive aquaculture production system gained significantly highest return on investment (ROI) for about .34 and significantly lowest in payback period (PBP) for 2.92 production period; while, intensive production system gained the significantly lowest return on investment of .24 and significantly highest in payback period for 4.30 production period; and semi-intensive aquaculture production system gained a .28 ROI, lower than extensive but higher than intensive systems. In terms of PBP which was 3.58 production period, it was higher than extensive, but lower than intensive. The significant positive relationship on the financial performance signifies the positive effect of the variables on the capitalization of the milkfish growers. On the five stated problems met, most of them was environmental problem which was handled using adapted strategies, while the fluctuating change in the fish farm gate price, variable cost, fixed cost that affects milkfish production and sales was manageable. Milkfish aquaculture in the 5th District of Negros Occidental was operational and sustainable; hence, economically profitable and socially acceptable. Keywords: economic analysis, Milkfish aquaculture, financial performance, coping strategies, payback period INTRODUCTION Aquaculture in the Philippines can be traced to fourteen centuries, starting with the traditional, low density culture of fish in earthen ponds evolving into more sophisticated technology-based systems such as pens and cages net structures installed in inland and marine waters (Lopez, 2005b: Abeto 2008). Even though it began early, it was only in the 1940’s that the aquaculture industry was recognized (Yap, 1999). Since then, the sector continued to improve from annual production of about 20, 000 tons a year in 1940’s to almost 4.16 million tons in 2005 (BFAR, 2006). Annual performance of Philippine fisheries is attributed to three subsectors – the small-scale fisheries, commercial fisheries, and aquaculture. Among the three, it is the aquaculture that has a greatest contribution to fish production (Teves and Ragaza, 2014). The 8,500 metric tons in fish production per quarter makes Negros Occidental maintained its sufficiency in fish production (The Daily Guardian, 2015). Negros Occidental plays a vital role in the fishing industry by keeping up on demands and stabilizing prices of Trident - Journal of Fisheries and Social Development (JOFSD). Volume 11, No. 1, JUNE 2019 www.tridentjournal.com Economic Analysis of Milkfish Aquaculture in Southern Negros Occidental, Philippines fish commodities in the market. The province has around 8,500 hectares of aquaculture areas for tilapia, bangus, shimp, prawn and other minor aquaculture products. Bangus top as the biggest aquaculture product in the province in terms of volume. The municipalities of Hinigaran and Binalbagan including the city of Himamaylan are the coastal areas in 5th Congressional District of Negros Occidental. Like other coastal cities and municipalities, this three LGU’s also plays a vital role in the economy of the province if aquaculture production is to talk about. Common fishery products produced were bangus, tilapia, oysters, mussels, shrimps and prawn. However, bangus is the most prominent cultured species and culture varies from earthen ponds to fish pens and cages. Customer’s preference, high market demand, easiness in production and high profitability are the common factors why most fish growers choose Milkfish as cultured species. Statement of the Problem. Generally, this study sought to determine the Economic Analysis of Milkfish Aquaculture in the 5th District of Negros Occidental for the year 2012 - 2014. Specifically, it pursued to answer the following questions: (1) What is the profile of milkfish? (2) What is the financial performance of milkfish aquaculture in 5th District in terms of net profit margin, return on investment, payback period and break-even sales when grouped according to type of ownership and aquaculture production system? (3) What is the percentage change in cost of inputs and the percentage change of fish farm gate price among the type of aquaculture production system? (4) What are the problems met by the milkfish growers in terms of environmental factor, technical factor, social factor, disease occurrence, and economic factor? and (5) What are the strategies adapted by the milkfish aquaculture growers to answer the problems on environmental, technical, social, diseases and economic factor? METHODOLOGY Research Design. The descriptive-correlational method of research analyzing the economic efficiency of milkfish aquaculture operation and production in the 5th District of Negros Occidental for fiscal year 2012-2014 was used in this study. Locale of the Study. The coastal municipalities and city in the 5th district namely Binalbagan, Hinigaran, and Himamaylan City were existence of the milkfish aquaculture industry is reported served as the locale of the study. Respondents. The respondents of the study were the 28 milkfish growers who were fishers and operators of fish cage (net pen) and pond aquaculture identified in the selected areas. This was utilized since the characteristics of the total population was identified and determined, and can be managed according to the scope (time) of the study. Research Instrument. The self-made research instrument was used in this study which was developed through literature readings and preliminary interviews. The instrument was composed of four parts: Part 1 was composed of the fish growers’ profile (age; sex; educational attainment; number of years in operation; capitalization; location of farms; size of the fish farm; types of aquaculture system; and types of ownership); Part 2 was composed Trident - Journal of Fisheries and Social Development (JOFSD). Volume 11, No. 1 JUNE 2019 pISSN2094-445 2 www.tridentjournal.com Economic Analysis of Milkfish Aquaculture in Southern Negros Occidental, Philippines of an open-ended questions which ascertain the fish growers’ financial data in terms of Production in kg, Fish farm gate price/kg, Variable cost and fixed cost; Part 3 was a checklist that allows respondents to identify problems they met in terms of Environmental, Technical, Social, Disease and Economic; and, Part 4 was composed of open-ended questions that filled up with statements that identified the respondents’ measures adapted based on the specific problems met. Validity and Reliability of the Instrument. To establish the validity of the researcher-made questionnaire, it was presented to four (4) selected panel of experts composed of competent fishery technology and business administration professors, and milkfish aquaculture practitioner. Comments and suggestions were considered. In addition, Good and Scates Validity Evaluation Instrument with a scale of 1 interpreted as very unsatisfactory and as 5 as outstanding, the mean value of 4.5 proved the instrument valid. To establish the reliability of the questionnaire, Chronbach’s Alpha used. Ten (10) dry-run respondents who were milkfish growers in Kabankalan City were asked to answer the questionnaire. Obtaining the value of 0.95 meant that the questionnaire got a good reliability index. Data Gathering Procedure. Permission to conduct the study was approved by the 28 milkfish growers in the Municipality of Hinigaran and Binalbagan and the City of Himamaylan. The distribution of the questionnaires was personally administered by the researcher from last week of May up to July 2015. The data collected was encoded, tabulated and organized for statistical and financial analysis. Data Analysis. For Problem 1, that determined the profile of milkfish growers, frequency and percentage distribution was used. For problem 2, that determined financial performance of milkfish aquaculture in the 5th District of Negros Occidental in terms of net profit margin, return on investment, payback period and break-even sales when grouped according to type of ownership and aquaculture production system, the sensitivity analysis was used. For problem 3, that identified the percentage change in cost of inputs and percentage change of fish farm gate price was determine by difference of current and previous value divide previous value and multiply to 100. A positive value indicates there was an increased while negative value justified a decreased and zero was stable. Significant difference in the return on investment and cost of inputs of milkfish aquaculture grouped according to to type of aquaculture production system, Kruskall Wallis Test (Pearson’s Chi- square) at 0.05 alpha level was used. The significant relationship between capitalization and return on investment according
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