The impacts of aquaculture on Myanmar s rural economy Ben Belton - Michigan State University Mateusz Filipski - International Food Policy Research Institute Myanmar Fisheries Partnership Meeting #3 Ministry of Agriculture, Livestock and Irrigation Naypyidaw 13th March 2017
Outline The Food Security Policy Project Myanmar Aquaculture-Agriculture Survey (MAAS) Impacts of aquaculture on the rural economy Implications and the way forward
Food Security Policy Project (FSP) USAID & LIFT funded partnership implemented by MSU, CESD, and IFPRI October 2014-2019 Objectives: Generating and disseminating new knowledge to address evidence gaps and inform better agricultural policy Capacity building and strengthening for research and policy at union and regional levels Research to date on: Aquaculture and agriculture in Delta, Livelihoods and rural economy in Mon State; Agricultural mechanization; Agriculture and livelihoods in Dry Zone
Myanmar Aquaculture Agriculture Survey (MAAS) Builds on earlier qualitative study of aquaculture value chain Implemented May 2016 Aims Generate a baseline of information on fish and crop farming sectors Understand and quantify economic spillovers from aquaculture and agriculture
Survey Methodology Selected clusters of aquaculture and agriculture village tracts, based on spatial concentration of ponds and prevailing crop farming systems Randomly selected enumerations areas and households to represent entire populations of both clusters (including non-farm households) Total sample = 1102 HHs (224 aquaculture HH) in 40 village tracts, representing 37,390 HH
Survey locations
Returns from agriculture and aquaculture Gross margin/acre (Lakh Kyat) 9.0 8.0 7.0 6.0 5.0 4.0 3.0 2.0 1.0 $91 $117 $134 $202 $191 $655 0.0 Monsoon paddy Dry season paddy Black gram Green gram Agriculture (annual average - all crops) Aquaculture Average profit margin per acre for paddy, pulses and aquaculture
Demand for labor in aquaculture and agriculture 160 152 140 Person days/acre/year 120 100 80 60 40 20 24 41 17 94 0 Crop farms (all farm average) Fish farms (<10 acres) Fish farms (10-40 acres) Fish farms (>40 acres) Fish farms (all farm average) Average annual demand for labor (family + temporary + permanent) per acre, for agriculture, and fish farms of different sizes
Modelling the impacts of aquaculture on the rural economy Model comprised of 5 types of household (Small fish farm, Large fish farm; Fish nursery; Crop farm, Landless) Used data on all the economic activities of all households in aquaculture cluster village tracts, including amount of land, labour, capital and production inputs, to model flows of money within rural economy 5 Simulations: sim1 sim2 sim3 sim4 sim5 Give 1 acre to small fish farmer Give 1 acre to big fish farmer Give 1 acre to crop farmer Allow small fish farmer to convert one acre of own crop land into pond Allow large fish farmer to convert one acre of own crop land into pond
Income effects Additional income created (Lakh Kyat) 4.50 4.00 3.50 3.00 2.50 2.00 1.50 1.00 0.50 0.00 3.91 SIM1: free acre small aqua 2.73 SIM2: free acre big aqua 1.36 SIM3: free acre agri Change in total income in the economy 2.57 SIM4: convert crop->small fish 1.40 SIM5: convert crop-> big fish
Direct and income effects Additional income created (Lakh Kyat) 4.50 4.00 3.50 3.00 2.50 2.00 1.50 1.00 0.50 0.00 1.93 1.98 SIM1: free acre small aqua 1.51 1.22 SIM2: free acre big aqua 0.55 0.80 SIM3: free acre agri direct 1.32 1.24 SIM4: convert crop- >small fish indirect 0.94 0.46 SIM5: convert crop- > big fish Income gain by direct and indirect beneficiaries
Distribution of income effects Change in income (Lakh Kyat) 2.50 2.00 1.50 1.00 0.50 0.00-0.50 SIM1: free acre small aqua Small Fish framer Big Fish Farmer Nurseries Crop Farmer Landless SIM2: free acre big aqua SIM3: free acre agri SIM4: convert crop- >small fish SIM5: convert crop-> big fish -1.00 Income effects in simulations, by type of household
Effects on demand for labor Additional labor income (Lakh Kyat) 1.40 1.20 1.00 0.80 0.60 0.40 0.20 0.00 Small Fish framer Big Fish Farmer Nurseries Crop Farmer Landless SIM1: free acre small aqua SIM2: free acre big aqua SIM3: free acre agri SIM4: convert crop- >small fish SIM5: convert crop- > big fish Change in labor income by household type
Income inequality effects 0.080% 0.060% 0.040% 0.020% Thiel index 0.000% -0.020% SIM1: free acre small aqua SIM2: free acre big aqua SIM3: free acre agri SIM4: convert crop- >small fish SIM5: convert crop- > big fish -0.040% -0.060% Effect on income inequality in the cluster (Theil index)
Take home points Average profits from aquaculture are several times higher than from crop farming Aquaculture creates more on-farm employment opportunities than crop farming (especially on small farms) For an equivalent increase in farm area, aquaculture creates more value in rural economy than agriculture About half of the value added goes to indirect beneficiaries (e.g. labor, nurseries) Small fish farms create larger income effects per acre than large farms, and these effects reduce income inequality. Income gains made by large farms increase inequality
The way forward Future develop pathway options for Myanmar ØFacilitate smallholder inclusion in aquaculture (e.g. no restrictions on agricultural land use, better access to credit with suitable terms) ØDiversification of species farmed ØSupporting private and public investments (e.g. research, education, food safety, veterinary services).