What factors contributed to the phenomenal growth of the tilapia industry from 1970s to 2006? Is this growth sustainable?
Dr. Yolanda T. Garcia, Professor at the Department of Economics, College of Economics and Management, University of the Philippines Los Baños answered these two main questions in her ADSS presentation titled “The Role of Productivity, Technical Change and Farmer’s Efficiency in the Dynamic Growth of the Tilapia Industry in the Philippines.” She delivered the seminar on 9 August 2011 at SEARCA.
Tilapia is the Philippines’ third largest aquaculture product in terms of volume (after seaweeds and milkfish) and value (after milkfish and tiger prawn). A species native to Africa, Oreochromis mossambicus tilapia was first introduced in the Philippines in the 1950s. However, tilapia aquaculture did not really take off until 1972, when the species Oreochromis niloticus was accepted as food fish mostly in Luzon. Since then, efforts have been underway to genetically improve tilapia strains in the country. Through hybridization of the Nile tilapia, the Freshwater Aquaculture Center (FAC) of the Central Luzon State University (CLSU), National Freshwater Fisheries Technology Center (NFFTC) of the Bureau of Fisheries and Aquatic Resources (BFAR) and The WorldFish Center (formerly ICLARM) have worked together since the late 1970s to develop several genetically improved tilapia strains. These strains that proved to be viable in the market include FaST (FAC Selected strain), GMT (Genetically Male Tilapia), GIFT (Genetically Improved Farmed Tilapia) and GET-Excel (Genetically Enhanced Tilapia).
National tilapia production had increased by more than 1,600 times from 1976 with an output of only 16,000 mt to 258,664 mt in 2010. Growth in production had been exceptional, particularly from the late 70s up to 2006. As a result of the rapid increase in production, the real price of tilapia had declined over time, which is highly beneficial to consumers. To date, tilapia has replaced “galunggong” as the poor man’s fish. It has provided Filipinos, especially the lower income households, with access to cheap source of animal protein.
Dr. Garcia found that pond culture of tilapia in Region III (Central Luzon) from 1996-2002 yielded high total factor productivity (TFP) growth1 especially in areas near the Tilapia Science Center where genetically improved fry are generally accessible (13.2% annually in Nueva Ecija). However, in areas where new tilapia strains are not available, TFP growth proved to be low (only around 3%).
Looking at the data of tilapia fish cages in Taal Lake, Batangas, Dr. Garcia found that the TFP growth of the industry from 2003-2006 was 27.08 percent. Broken down to its components, the technical change effect registered the lowest contribution of 1.2%, primarily due to the lack of access to improved fry owing to distance from the accredited hatchery centers. As a result, the tilapia cage farmers in Taal Lake were not able to take advantage of the benefits of the genetically enhanced strains. Dr. Garcia recommended that a network of licensed hatcheries and nurseries for the new strains be established in all tilapia-growing areas in the country.
The speaker also asserted that there is still plenty of room for improvement of farmers’ efficiency as the overall technically efficiency of farmers was estimated to be only 62.5 in 2003 and 67.8 in 2006. Despite the 5.3% increase over the three-year period, technical efficiency of farmers is deemed to be low and can be improved through training and more serious technology extension either from the public or private sectors.
Dr. Garcia also characterized fish cage operation in Taal Lake to have negative scale effect, which means that increasing the present scale of fish cage operation in the lake is no longer advisable. She added that this finds support in the current local government’s move to limit aquaculture operations to certain parts of the lake as a response to municipal zoning for tourism and expansion of lake protected areas.
Also, the speaker claims that tilapia fish cage operation in Taal Lake is not price efficient especially since there is overutilization of feeds and labor inputs. Hence, price efficiency can be enhanced if tilapia operators will reduce feeding rate, which in turn will also decrease labor use. These moves are both cost-saving and will therefore increase profits for cage operators.
The speaker also offered recommendations to boost tilapia production especially since the industry’s growth had been continuously declining in the last four years. These include: (1) quantity and price intervention policies by the government through the following: a) wider scope of fingerling dispersal by BFAR to provide cheaper and quality fingerlings to farmers especially in remote areas; b) farm-to-market roads to help farmers in far-flung areas to get better price for their harvest; and c) altering consumer preference for tilapia through food fairs (i.e., increasing demand for fresh chilled instead of live tilapia to increase market share) and value addition (i.e., production of tilapia fillet to expand the market). The author also suggested that R&D for saline-tolerant tilapia should be intensified considering that 90% of the Philippine waters are brackish in nature. Extending tilapia culture outside the confines of freshwater environment can create strong potential to increase tilapia production in the country.
To answer the question, Is the growth in tilapia production sustainable? Dr. Garcia asserted that the higher cost of production due to intensified use of inputs and decreasing real prices of tilapia (wholesale and retail) present a double squeeze to farmers in their profit margins. She said this posed a serious challenge to the growth of the industry. One strategy to address this issue is through cost reduction by employing more efficient feeding management to reduce the use of commercial feeds or through the provision of alternate, cheaper feed (e.g., duckweed). Also, reversing the trend in real tilapia prices by creating demand for tilapia in areas where it is not traditionally consumed (i.e., Visayas and Mindanao) can help ease the situation. In addition, environmental pollution caused by excess feeds that settled in the pond or lake bottom leading to disease outbreak and fish kills can be minimized through good aquaculture practice and awareness of proper environmental management.
1 "Growth in totalfactor productivty (TFP) represents output growth not accounted for by the growth in input use, but by technical efficiency, technological progress, efficiency in the scale of operation and allocative or price efficiency (Fioramante, 2009) In Working paper No. 114, ISAE, Italy.
The point of view taken by this article is entirely that of the presenter's and does not reflect in any way, SEARCA’s position.