The Impacts of Aquaculture in the Rural Economy

Myanmar Aquaculture-Agriculture Survey: Results and Dissemination Workshop
The Impacts of Aquaculture in the Rural Economy

Mateusz Filipski  - International Food Policy Research Institute
Ben Belton  - Michigan State University

USAID Burma and LIFT
Sedona Hotel, Yangon, Myanmar
June 30, 2017

ABSTRACT
The rapid growth of fish farming over the past three decades has generated heated debates over the place of aquaculture in rural development and poverty reduction.  Central to these debates is the question of whether and how aquaculture impacts local incomes and employment, yet little empirical evidence exists on the issue. 

This paper proposes a Local Economy-wide Impact Evaluation (LEWIE) approach which nests fish farm models within a general-equilibrium model of their local economy.  The model is calibrated using household data from Myanmar’s principal aquaculture cluster, representative of 90% of the country’s aquaculture farms. Using this model, we examine the impact of aquaculture on the incomes and labor market outcomes of fish farming households, but also of crop farms and non-farm households in the cluster. 

Simulating a one-acre increase in pond/plot surface we find that
(1) aquaculture generates much higher incomes than agriculture on a per-acre basis;
(2) aquaculture generates higher income spillovers for non-farm households than agriculture, by way of retail and labor markets, and
(3) that small-scale fish farms generate higher spillovers than large-scale fish farms.

These results shed light on the economic processes that have shaped the development of aquaculture in Myanmar.  More generally, they bolster the notion that beyond subsistence fish-farming, small-scale commercial aquaculture may have a significant role to play in rural development and poverty reduction.

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