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Cost-Effectiveness of Nutrient Pollution Reduction in Taal Lake, Philippines

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Cost-Effectiveness of Nutrient Pollution Reduction in Taal Lake, Philippines .v 3.5 .. ,5- \ .| at. Q. x. mm. .Ju “vamé $.er {.1 - :3.-#51153 . 3 2.... fiWW $.31. f E A u. {Ian 2, . #53"garitbhak. in .. .31 5. 6951M??? LIBRARY M'Ch'gan State This is to certify that the Umversuty thesis entitled COST-EFFECTIVENESS OF NUTRIENT POLLUTION REDUCTION IN TAAL LAKE, PHILIPPINES presented by ARVIN BUENO VISTA has been accepted towards fulfillment of the requirements for the MS. degree in Agricultural Economics Major Professor’s Signature Q~J9-03 Date MSU is an Affirmative Action/Equal Opportunity Institution PLACE IN RETURN BOX to remove this checkout from your record. TO AVOID FINES return on or before date due. MAY BE RECALLED with earlier due date if requested. DATE DUE DATE DUE DATE DUE 6/01 cJCIRC/DateDuepGS-p. 15 COST-EFFECTIVENESS OF NUTRIENT POLLUTION REDUCTION IN TAAL LAKE, PHILIPPNES By Arvin Bueno Vista A THESIS Submitted to Michigan State University in partial fulfillment of the requirements for the degree of MASTER OF SCIENCE Department of Agricultural Economics 2003 ABSTRACT COST-EFFECTIVENESS OF NUTRIENT POLLUTION REDUCTION IN TAAL LAKE, PHILIPPINES By Arvin Bueno Vista Stakeholders of the Taal Lake fish cage industry face the challenge of producing fish in a situation of frequent fish kill occurrences, which have been attributed to the deteriorating water quality due to nutrient pollution from fish cages. This study estimates the cost-effectiveness of nutrient pollution reduction options. Fifiy operators were surveyed and the production data elicited were used in the estimation of a Cobb- Douglas production function. Results show that the types of ownership arrangements and institutional set-up in the municipalities of Agoncillo, Laurel, San Nicholas, and Talisay affect the production efficiency and nutrient loadings in the four cage locations. Marginal analysis reveals that operators are over-utilizing stocking density relative to feeding ration. At different percentage reductions in nutrient loadings, the cost- effectiveness of nutrient pollution reduction options differs among municipalities. With the current fish production technology and institutional set-up, nutrient pollution and decreasing biodiversity are inevitable. Developments in the institutional structures may lead to future technological changes in the fish production system and improvement of water quality in cage areas. Corp/right by ARVIN B. VISTA 2003 To a dear fi'iend and sister in Christ. iv ACKNOWLEDGEMENTS I am grateful to all who provided assistance to make this research possible and successful. Thanks are due to Dr. Patricia Norris, Dr. Richard Bemsten, and Dr. Frank Lupi, for valuable comments and suggestions on improving the thesis. Your guidance, advice, careful instructions, and time exerted toward the completion of my program are greatly appreciated. The Department of Agricultural Economics and the Graduate School for providing the Research Enhancement Award. The J. William Fulbright Foreign Scholarship Board and the Department of Agriculture through the Philippine-American Educational Foundation for providing the financial grant for my masters program. Ms. Leah Villanueva, Ms. Maurita Rosana, Ms. Nenita Salisi, Ms. Jocelyn dela Vega, Regie, Max, and the rest of BF AR-IFRS Region IV staff; Ms. Maris Mutia and NFBC staff, for providing data, assistance, and hospitality during the field survey. Field assistants, Cesar, Sheryl, and Michael; and barangay/municipal officials of Agoncillo, Laurel, San Nicholas, and Talisay, for providing help and guidance during the survey interview. Dr. Scott Swinton and Ms. Lan Xue for providing advice in the production func- tion analysis and statistical interpretation. Dr. Renate Snider, NSC 840 writing group members, Cathy, Chris, Meeta, Kofi, Osamu, Maan, and Lesiba for your comments and suggestions on the draft chapters of the thesis. Gem, Tito, Marita, Eugene, Utami, Ralph, Danny, Analie, Paul, Lakas Angkan Family, Dennis, Althea, Sean, Sungjoon, Chi-Ching, Keiko, Shufen, Ayumu, Sun Young, J ong and URC friends for the encouragement and prayer to press on. Equally encouraging was the Joshua Family (Willy, Vida, Egay, Adrian, Fred, Shouny, Liza, Jerry, et al.) for providing constant prayer. Your continuous devotion and encouragement lifts up my enthusiasm during lonely moments. The Fulbright-DA fellow grantees, MSU Filipino Club, and colleagues at Cook Hall, for the support, fellowship, and laughter. Rico, Diomy, Kent, Kat, and Khalil for your advice and warm welcome in your place. One week of escape from the winter frost of December was very relaxing and helpful for me to focus on life priorities. Tatay, Nanay, Pong, and Bunso for the understanding and support. Most of all, to our Lord Almighty, who daily provide strength and wonderful grace. Your words are constant source of inspiration to make things possible and worth fulfilling. vi TABLE OF CONTENTS LIST OF TABLES .................................................................................. ix LIST OF FIGURES ............................................................................... xii KEY TO ABBREVIATIONS .................................................................... .xiii CHAPTER 1 ....................................................................................................................... 1 INTRODUCTION .............................................................................................................. 1 Problem Statement .......................................................................................................... 2 Research Questions ......................................................................................................... 4 Research Objectives ........................................................................................................ 4 Organization of the Thesis .............................................................................................. 5 CHAPTER 2 ....................................................................................................................... 7 TAAL LAKE AND ITS ENVIRONMENT ....................................................................... 7 A Glimpse of Taal Lake and the Fish Cage Industry ...................................................... 7 Batangas Province and Taal Lake: Historical Background .......................................... 17 The Taal Lake Watershed ............................................................................................. 21 Bio-Physical Characteristics ..................................................................................... 21 Water Quality and Chemical Characteristics ............................................................ 26 Fish Cage History and Development in Taal Lake ....................................................... 34 Fishery Management, Regulation, and Legislation ...................................................... 35 CHAPTER 3 ..................................................................................................................... 42 CONCEPTUAL FRAMEWORK ..................................................................................... 42 The Bio-Economic Approach to Efficient Allocation of Fishery Resources ............... 42 Institutional Perspectives for Understanding the Nutrient Pollution Dynamics in Taal Lake ............................................................................................................................... 47 Nutrient Pollution Reduction Options in the Taal Lake Fish Cage Industry ................ 51 Why Cost-Effectiveness Analysis? ............................................................................... 53 Evaluating the Pollution Reduction Options ................................................................. 54 CHAPTER 4 ..................................................................................................................... 56 RESEARCH METHODS ................................................................................................. 56 Implementation Model .................................................................................................. 56 Cost—Effectiveness of Nutrient Pollution Reduction ..................................................... 61 Fish Cage Operator Survey ........................................................................................... 63 The Survey Process ................................................................................................... 63 The Survey Questionnaire ......................................................................................... 64 The Survey Sample Size ........................................................................................... 66 Secondary Sources of Information ............................................................................ 67 vii CHAPTER 5 ..................................................................................................................... 69 RESULTS OF SURVEY OF THE TAAL LAKE FISH CAGE OPERATORS .............. 69 Socio-Economic Characteristics of the Fish Cage Operators ....................................... 69 Fish Cage Production and Management ....................................................................... 71 Fish Cage Construction ............................................................................................. 72 Fingerlings and Stocking .......................................................................................... 75 Feed and Feeding Management ...............................................................................
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