An economic analysis of pond polyculture in Bangladesh : efficiency, comparative returns, and related environmental and poverty issues

Saha, Nirmal Chandra. (2003). An economic analysis of pond polyculture in Bangladesh : efficiency, comparative returns, and related environmental and poverty issues PhD Thesis, School of Economics, The University of Queensland.

       
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Author Saha, Nirmal Chandra.
Thesis Title An economic analysis of pond polyculture in Bangladesh : efficiency, comparative returns, and related environmental and poverty issues
School, Centre or Institute School of Economics
Institution The University of Queensland
Publication date 2003
Thesis type PhD Thesis
Supervisor Tisdell, C. A.
Alauddin, M.
Total pages 185
Collection year 2004
Language eng
Subjects L
340201 Agricultural Economics
340213 Economic Development and Growth
720404 Productivity
Formatted abstract The thesis involves an analysis of economics of pond polyculture in Bangladesh and its comparison with rice production. The study encompasses various aspects of efficiency measures, decision-making under uncertainty, and is underpinned by a microeconomic perspective, and includes a consideration of environmental parameters and poverty alleviation as a by-product offish polyculture in Bangladesh.

More than 75 per cent of the farmers belong to landless and small groups who live in absolute poverty and have been suffering from malnutrition. Moreover, the population growth rate of 1.7 per cent annually adds 2-3 per cent to the ranks of the landlessness (BBS 1999). There has been massive investment in the agricultural sector continuously since early 1970s to boost up the crop production, and eventually the country has attained grain self-sufficiency. But more than 45 per cent of the total population still cannot ensure even 1,500-kilocalorie per day (BBS 1999). In this background, the landless and small farmers consider fish production in pond to be one of the best alternatives, not only for their fulfillment of energy and protein requirements, but a way of better livelihood than rice farming.

Grain yields that of especially rice in Bangladesh may not be far below a maximum possible yield using improved technology and HYVs rice given environmental and ecological constraints. This study provides some empirical evidence that pond polyculture is an efficient venture of income generating activities as compared to rice production for the people in developing countries where there is little scope to improve their living standards through industrial development and rice production. The use of chemical fertilizers and pesticides for HYVs grain production has harmful impacts on human health and the environment. With a view to eradicating poverty, improving malnutrition and conserving the environment, fish production may be a better option compared to any other production processes. This study reveals that fish production in ponds can earn more than 2-3 times the return from rice production from a farm of the same size. High population growth and the resulting intense pressure on arable land have lead to fragmentation of agriculture households.

Consequently, the small land holding can not meet up the food, nutrient and also the basic needs of the people by only relating to crop production. Moreover, government and non-government organizations from national and international perspectives are trying to boost up food security and nutritional requirements of the people in the world. That is why, they are providing financial assistance to landless and small farmers to engage in fish and livestock production rather than rice production. This study, based on those farmers who have been receiving financial assistance and technical know-how from ICLARM and DFID for fish production, shows that fish farming is more efficient than rice farming and may significantly alleviate poverty.

The potential of fisheries sector is a well-established fact in Bangladesh. In spite of this, pond aquaculture development is a very recent phenomenon. Although, land in Bangladesh is intensively cultivated for grain and cash crop production, this is not the case for ponds, where fish can be easily produced, and can fulfill the much-needed protein and cash requirements of the poor people.

Since the fisheries sector is neglected, but has a great potential to increase its production to meet the protein requirements of the people in Bangladesh, and it requires a continuous effort from private and government organizations for its proper development. Under these circumstances, efficiency of its production and its components are of much interest as indicators of the progress with the development of aquaculture in Bangladesh. While fish production is considered to be a key to meet the protein requirements of rural people in Bangladesh, there has been no rigorous study in the context of the pond polyculture farming. This study attempts to explore and utilize recent developments of economic performance measurement models to explore this topic. Specifically, it attempts to estimate the efficiency of pond polyculture production and its components. The thesis provides individual estimates for technical, allocative and cost inefficiency in pond polyculture in Bangladesh. The cross-sectional data for Bangladesh pond polyculture farms for the period 1998-99 are ufilized in the study's empirical investigation.

Several factors underlie the lack of interest in pond aquaculture by many rural farmers, in spite of its potential. One of the major reasons could be the information gap that exists between the poor farmers and research findings. Poor and subsistence farmers may continue to cultivate their farmlands to produce a certain amount of rice for their family consumption irrespective of the profitability in aquaculture. Tradhional farmers, however, do not consider aquaculture, as important as rice production. They undertake pond aquaculture only when they are convinced that it is remarkably profitable compared to rice production.

Another reason for lack of interest of farmers in pond polyculture is their economic inefficiency in the production process. The thesis makes an extensive study of production efficiency measures and applies these to investigate in to the overall economic efficiency of pond aquaculture.

The study, based on a data of pond aquaculture, suggests various ways by which efficiency and profitability could be improved. Micro-econometric and linear programming techniques were employed to analyze efficiency. The same techniques are used for analysis of relevant data for rice production.

Measurement of efficiency was undertaken for both fish production and rice production and the optimal choice of product-mix is examined using a game theorefic approach. The analysis suggests that a farmer fully aware of the economics of both pond aquaculture and rice production, would prefer fish to rice, although they would produce a minimum amount of rice for their sustenance. The results of the game theoretic approach suggest that an information gap exists amongst the farmers regarding the profitability of aquaculture.

In addition to establishing the potential and profitability of pond aquaculture, the thesis explains and analyzes various externalities that are inherent in fish production. The advent of pond polyculture could lead to an overall improvement in environment by reducing the negative externalities of rice and other crop production. A Pigouvian framework is applied to formulate policy, which would improve the environment and pond polyculture.

The rural households, who have a pond on their farmland could use it for pond polyculture. This could facilitate alleviation of poverty in the rural areas of Bangladesh by generating higher incomes and fulfilling nutritional requirements. Establishing the potential for pond polyculture to alleviate rural poverty is a major contribution of this thesis.
Keyword Aquaculture -- Economic aspects -- Bangladesh

 
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