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Assessing the Sustainability of Brackish-Water Aquaculture Systems in the Philippines

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Assessing the Sustainability of Brackish-Water Aquaculture Systems in the Philippines Assessing the sustainability of brackish-water aquaculture systems in the Philippines Final report on DFID/AFGRP research project R8288 Xavier Irz and James R. Stevenson University of Reading, Department of Agricultural & Food Economics Contributors: Rose-Glenda Alcade Philippine Council for Aquatic and Marine Research and Development (PCAMRD), Los Banos, Philippines Pierre Morissens Coopération Internationale en Recherche Agronomique pour le Développement (CIRAD), Equipe Aquaculture, Montpellier, France Jean Petit INRA, UMR Sol, Agronomie et Spatialisation de Rennes-Quimper, Rennes, France Arnold Tanoy Portia Villarante Other Collaborators: Rafael D. Guerrero III (PCAMRD-DOST); Jurgenne Primavera (SEAFDEC-AQD); Clarissa Rubio (UP Diliman) ACKNOWLEDGMENTS The authors would like to acknowledge the help of several people in designing and carrying out this project, including Kristine-Joy Lapitan; James Muir (AFGRP-University of Stirling); Roger Pullin; and Tahir Rehman (University of Reading). We are also grateful to all the participants at the workshop organized in Los Banõs on 22 April 2005 by the University and Reading and PCAMRD on the theme ‘aquaculture and poverty’ for their insightful comments and suggestions. Finally, we would like to thank the numerous individuals who helped us in collecting primary data for this project, including the municipal and barangay officials who allowed us to carry out this research in their communities, as well as the residents of these communities who accepted to be interviewed and to openly share their views and experiences with us. DISCLAIMER This document is an output from a project funded by the UK Department for International Development (DFID) for the benefit of developing countries. The views expressed are not necessarily those of DFID. ii TABLE OF CONTENTS Executive summary 1 Background to the project 8 Project purpose 8 Research Activities 8 Research Outputs 8 Contribution of outputs to development impacts 9 List of outputs 10 Appendices 12 Paper 1 13 Paper 2 50 Paper 3 145 Paper 4 174 Paper 5 231 Project logical framework 261 Project proposal 263 iii EXECUTIVE SUMMARY 1- The project comprises five separate papers investigating different aspects of brackish water aquaculture in the Philippines. Papers 1 to 3 form the core of the project and progress towards the establishment of a ranking of different farming systems in terms of their relative sustainability. Paper 4 represents an extension of the original project proposal, as agreed with James Muir, which investigates in detail the role that aquaculture plays in the lives of poor people in the coastal areas of the Philippines. Finally, paper 5 investigates whether an efficiency case can be made for land reform in brackish water aquaculture in the Philippines. Hence, it is somewhat peripheral to the project but relates to the socio- economic analysis presented in paper 2, and in this regard was deemed worth including. Paper Title Aim number 1 A typology of brackish-water pond Identify a small number of farming aquaculture systems in the Philippines systems for comparative analysis of sustainability 2 Indicators of economic, ecological and Establish the relative performance of socio-economic performance of farming systems in economic, aquaculture systems ecological and social dimensions 3 Analysing trade-offs among indicators of Rank the farming systems identified sustainability: a multi-criteria approach in paper 2 in terms of their relative sustainability 4 Aquaculture and poverty – A case study Analyse the contributions that of five coastal communities in the aquaculture makes to the livelihoods Philippines of poor people in coastal areas 5 Is there an efficiency case for land Test for the presence of an inverse redistribution in Philippine brackish water relationship between farm size and aquaculture? efficiency, which would provide an efficiency rationale for land redistribution 2- We start by presenting the findings of the project and continue by formulating a number of recommendations. AQUACULTURE FARMING SYSTEMS (Paper 1) 3- The construction of typologies of farming systems using multivariate datasets is increasingly perceived in the agriculture and, to a lesser extent, aquaculture literatures as being an important first step in comparative analysis. 4- A survey of brackish-water pond aquaculture farms was carried out in Regions III and VI – the two regions that account for the bulk of brackish-water aquaculture production in the Philippines. This yielded a net dataset (after removing inconsistent respondents) of 136 farms. Based on eight variables related to the use of labour, land and intermediate inputs (fertiliser, feed, fry), we identify three underlying latent variables (components) that explain 68% of the total variance in the original data by carrying out a principal components analysis. These three components (specialisation, land vs. labour intensity, and feed intensity) are used in a cluster analysis to establish five farm types. 5- The five farm types are labelled as follows: extensive polyculture (type 1, n=54); semi-intensive prawn polyculture (type 2, n=15); low-input labour-intensive systems (type 3, n=37); large, milkfish-oriented systems (type 4, n=11); and semi-intensive milkfish monoculture (type 5, n=19). These represent different combinations of production factors and characterise the full complexity of production systems in the Philippines, where traditional practices are mixed with new technologies and techniques. 1 6- This kind of typology offers greater realism than artificially imposed uni-dimensional classifications. For example, the concept of “intensity” can only refer to a specific input (e.g. land, labour, feed) even though the common division into extensive, semi-intensive and intensive systems requires a consideration of combinations of inputs. SUSTAINABILITY OF AQUACULTURE FARMING SYSTEMS (Paper 2) 7- Aquaculture in the Philippines provides important livelihood opportunities directly (i.e, on-farm) as well as indirectly through multiplier employment effects that spread throughout the rural economy. Further, it represents a potential net source of dietary protein for Filipinos, although it may actually reduce the stock of protein because of inefficient farm management or a focus on culturing species situated high on the aquatic food-web. There are also environmental issues associated with brackish-water aquaculture, particularly nutrient enrichment of surrounding waters, and the appropriation of coastal resources in form of wild fry and broodstock, and wild-caught feeds. Finally, aquaculture development has sometimes been accused of increasing social inequity and the deprivation of coastal communities. Altogether, the sector faces economic, social and environmental problems that may challenge its long-term sustainability and provide the motivation for this research. 8- Sustainability, as conceived under the common “three pillars” or “weak sustainability” frameworks, is considered to be achievable through the attainment of economic, social and ecological objectives in an appropriate balance. In this context, comparative sustainability at the farm level can be analysed using a number of indicators for specific objectives. We follow this approach to study farm-level sustainability by comparing indicator results for each of the five farm types established in paper 1. 9- Indicators are developed for six farm-level objectives: profit maximisation, risk minimisation, maximisation of technical efficiency, maximisation of employment effects, maximisation of net protein production, and minimisation of nutrient loss. 10- Mean gross margin per hectare per year is used as an indicator of farm-level profit. We find that all farm types are profitable on average, but with considerable heterogeneity. Semi-intensive prawn-oriented polyculture (farm type 2) returns the highest level of profit on average at 59,100 pesos per hectare per year. Extensive polyculture (farm type 1) has the second highest with 51,200 pesos per hectare per year. The lowest level of profit per unit area is found for very large farms (farm type 4, 27,800 pesos per hectare per year). 11- Risk is measured by the standard error of the mean gross margin for a given farm type, divided by the mean gross margin. This measure conflates price and production risks and would ideally be measured from panel data from different farms over a time-series. However, such data is not available and we are restricted to considering variability in one time period only. As might be expected, the farm type that returns the highest level of profit is also the most variable – semi-intensive prawn-oriented polyculture (farm type 2). It would seem that operators of this kind of farming system attempt to mitigate their production and price risks by diversifying revenue streams across four species (prawns, milkfish, tilapia and crab) because revenue diversity, as measured by a Shannon index, is highest for this farm type. 12- Technical efficiency is estimated using a stochastic production frontier analysis. A favoured model is specified and the technical efficiency effects of particular farm-level characteristics are identified. We find that the following factors all reduce technical inefficiency: the operator lives on the farm; uses a traditional lagum-lagum pattern of stock movement as well as probiotics; and tests the pH of the soil. Of the five farm types, the semi-intensive prawn-oriented polyculture systems (type 2) are the most inefficient at less than
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