Measuring Productivity Growth

in Philippine Aquaculture
Outline of Presentation
1. Brief profile of aquaculture industry
- Milkfish
- Tilapia
- Shrimp
- Seaweeds

2. Methodology for measuring and decomposing

productivity growth

3. Sources of data
Fish is an Important Economic
Commodity in the Philippines

• Fishery production
2.1% of GDP
15% of agriculture value added
Ranks 2nd to agricultural crops

• Fishery sector is net exporter

$325 USD in 2005

• Fish is a major source of animal

protein in the Philippines – as high as
70% especially among the poor households
 Aquaculture Profile
Figure 1: Growth of Aquaculture in the Philippines

2,000

1,500

'000 Tons
1,000

500

0
1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005

Year

Growing at 8% annually from 1997-2003,

presently at 10.4%
Production was 1.9 M metric tons valued at
49,170 M PHP in 2005
 Fish Production by Source

27%
46%

27%

Commercial Municipal Aquaculture

Aquaculture Species

9% 2% 4%

15%

70%

Seaweeds Milkfish Tilapia Tiger Prawn Others

Aquaculture Environments

13%
6%
9%

61%
11%

Brackishwater fishpond Freshwater fishcage

Freshwater fishpond Marine fishcage
Others
Volume of production by major aquaculture species

9% 2% 4%

15%

70%

Seaweeds Milkfish Tilapia

Tiger prawn Others

Value of production by major aquaculture species

6% 12%
28%

36%
18%

Seaweeds Milkfish Tilapia

Tiger prawn Others
 Production trend of seaweed

1,600,000
1,400,000
1,200,000

Metric Tons
1,000,000
800,000
600,000
400,000
200,000
0
1997 1998 1999 2000 2001 2002 2003 2004 2005

IV VII IX ARMM PHILIPPINES

Production trend of milkfish

350,000
300,000
Metric Tons

250,000
200,000
150,000
100,000
50,000
0
1997 1998 1999 2000 2001 2002 2003 2004 2005

I III IV VI PHILIPPINES
 Production trend of tilapia

180,000
160,000
140,000

Metric Tons
120,000
100,000
80,000
60,000
40,000
20,000
0
1997 1998 1999 2000 2001 2002 2003 2004 2005

III IV V XII PHILIPPINES

Production trend of tiger prawn

50,000
Metric Tons

40,000

30,000

20,000

10,000

0
1997 1998 1999 2000 2001 2002 2003 2004 2005

III IX X XII PHILIPPINES

 Methodology
A. Decomposition Analysis using Production
Function Approach

Yt = At LtB1 StB2 FtB3 KtB4 µt

Yt - yield of aquaculture farm

Lt - labor use
St - seeding rate
Ft - feeding rate
Kt - capital inputs

Take logarithm of the variables

Log Yt = log At + B1 log Lt + B2 log St + B3 log Ft + B4 Kt + Ut

Specify linearized production function for 2 time periods:

Period 0: Log Yt0 = log α t0 + β 1 log Lt0 + β 2 log St0 + β 3 log Ft0 + β 4 Kt0 + Ut0

Period 1: Log Yt1 = log α t1 + δ 1 log Lt1 + δ 2 log St1 + δ 3 log Ft1 + δ 4 Kt1 + Ut1
Subtract equation 0 from equation 1:

{(log Yt1 – log Yt0)} = [log α 1 – log α 0] +

[(β 11- δ 10) log Lt0 + (β 21- δ 20) log St0 + (β 31- δ 30) log Ft0 + (β 41- δ 40) log Kt0] +

[β 1(log Lt1- logLt0) + β 2(log St1- logSt0) + β 3(log Ft1- logFt0) + β 4(log Kt1- logKt0)] +

[µ 1 - µ 0]

Decomposition of Output Growth

LHS – Output growth

RHS:
1st term – neutral technological change
• allocative efficiency
• improvement in management practice, etc…
2nd term – non- neutral technological change
• innovations
• technical improvement
• technological progress
3rd term – change in output due to intensity in inputs used
4th term – random errors
 Example
Tilapia Production Funtion
2003 1996 2003 1996
Constant -20.25 -1.71 Gross Return 73,840 108,887
lnS 2.499 0.85 Mean S 17,869 7,807
lnF -0.387 0.05 Mean F 24,640 22,034
lnL 8.885 0.18 Mean L 310 3,694
lnK -4.764 0.02 Mean K 2,278 37,754

Applying the Decomposition Analysis:

Output Growth 43.64%
Neutral Technical Change -18.74%
Non-neutral Technical Change 13.68%
Intensity of Inputs Used 39.23%
Random Noise 9.47%
Total 43.64%
Data Availability (Seaweeds)
Seaweed: Percent Share in Production of Top
Producing Provinces, 2005

Other
provinces Palawan
23% 27%

Zamboanga
del Sur
Bohol
6%
7% Sulu Tawi-Tawi
14% 23%

3 largest producing provinces/regions

Palawan - Region 4B
Tawi-Tawi - ARMM
Sulu - ARMM

DATA :
BFAR Aquaculture Division – Seaweed Development Program
Production and input data available from 2000-2006
National level
Regional Level
Data Availability (Milkfish)
Milkfish: Percent Share in Production of T op
Producing Provinces, 2005

Bulacan
12%
Other Pangasinan
Provinces 20%
48%
Capiz
Negros OccIloilo 7%
5% 8%

3 largest producing provinces/regions

Pangasinan - Region 1
Bulacan - Region 3
Iloilo - Region 6

Recent data (2005) from the Milkfish Project of the WFC

Dasol, Pangasinan (fishpond)
Infanta, Pangasinan (fishpond)
Aringay, La Union (fishpen)
Sto Tomas, La Union (fishpond)

Need counterpart data: about a decade old from same localities

Possible sources: NIFTDC, PCAMRD
Regional BFAR
 Data Availability (Tilapia)
Average share of regions in total
production, 2001-2005

6% 5% 4%
4%

32% 49%

CAGAYAN VALLEY CENTRAL LUZON S. TAGALOG - A

BICOL REGION CENTRAL MINDANAO OTHERS

2 largest producing regions

Region 3 (Central Luzon)
Region 4-A (Calabarzon)

Recent data (2006) from the GIFT Project of The WorldFish Center
Laguna 250 samples (fishcages)
Batangas 250 samples (fishcages)
Pangasinan 200 samples (fishpond)
Nueva Ecija 200 samples (fishpond)
Pampanga 200 samples (fishpond)

Need counterpart data: about a decade old from same localities

Possible sources: FAC in CLSU, PCAMRD, Regional BFAR
 Data Availability (Prawn)
Shrimp: Percent Share in Production of Top
Producing Provinces, 2005

Zamboanga
del Sur
Other 8%
provinces Pampanga
22% 40%

Bohol
4%
Zamboanga Bataan
Lanao del
Sibugay Norte 3%
10% 13%

3 largest producing provinces/regions

Pampanga - Region 3 (Central Luzon)
Lanao del Norte - Region 10 (Northern Mindanao)
Sibugay - Region 9 (Zamboanga Peninsula)

Need to look for panel data (at least 10 years apart)

Possible sources: Regional BFAR Offices

PCAMRD
SEAFDEC
Collect primary data
 Analyzing Effect of Fisheries Policy and
Institutional Factors
(Yield Response Function)

Yt = f( Σ Pti, R&D, Tenure, AFMA, Technology…)

Yt – Yield of a particular species over time

Pti - Real prices of inputs over time
Tenure – Caretaker vs. owner operator
AFMA – year where AFMA was implemented 1999
Technology – new strain vs. traditional strain (Tilapia)
- wild fry vs. hatchery bred (Milkfish)
- Tiger shrimp vs. white shrimp