RURAL ECONOMIC SPILLOVERS FROM FISH FARMING AND AGRICULTURE IN THE AYEYARWADY DELTA
Creators: name: Filipski, Mateusz
name: Belton, Ben
name: Filipski, Mateusz
name: Belton, Ben
Publisher: name: Unknown
Year: 2017
Subjects: subject: Agribusiness
subject: Agricultural and Food Policy
subject: Agricultural Finance
subject: Food Security and Poverty
subject: RURAL ECONOMIC SPILLOVERS
subject: FISH FARMING
subject: AGRICULTURE
subject: AYEYARWADY DELTA

description: Aquaculture (fish farming) has been growing rapidly in Myanmar since 1990. Fish farms are concentrated in the Delta regions of Ayeyarwady and Yangon, where they cover an estimated 235,000 acres. Most fish farms in the Delta are in four townships - Maubin, Nyaungdon, Twantay and Kayan. Aquaculture is a high value activity in comparison with the cultivation of paddy (Myanmar’s most important crop in area terms). Average annual returns per acre from farming fish are several times higher than those from rice-based farming systems, but the productivity of fish farms in Myanmar still lags behind other countries in the region, leaving much room for future productivity growth. Half of Myanmar’s fish farms are small (below 10 acres in size), but these account for just 4% of total pond area. Conversely, 6% of farms are very large (sized 100 acres or more), and account for 60% of pond area. Two sets of laws are responsible for this highly concentrated “dualistic” farm structure (Belton et al., 2017a) First, the predominance of large fish farms in Myanmar is explained by the history of its agricultural land use policy. From 1989 onwards, large scale fish farming was promoted by government as part of a wider policy to encourage industrial scale forms of agriculture. As a result, large areas of untitled “wasteland” were allocated to investors in what are now the main fish farming areas. Second, the conversion of titled paddy land to any other use (including fish ponds) is heavily restricted. This regulation is intended to protect agricultural land and, thereby, national self-sufficiency in paddy cultivation. Moreover, to convert any type of agricultural land (paddy or non-paddy) to a non-agricultural use (including aquaculture) in a legally compliant manner, households must apply for and obtain a change of land use title. Obtaining this document is a complex, lengthy and costly process, and therefore a major barrier to entry to aquaculture for small farm households. Beyond generating income for farming households, fish and crop farms are both embedded in value chains. These value chains support livelihoods in the areas where farms are located by creating opportunities for businesses that provide goods such as feeds and other production inputs, services such as transport, and jobs that generate wages for workers. Workers, farmers, and owners of supporting enterprises in the value chain also spend their incomes on locally produced goods and services, causing money to circulate further through the local rural economy. These indirect “spillovers” can potentially reach and benefit large numbers of people. Current government policy aims to promote greater diversity in agriculture in order to raise the incomes of farm households and agribusinesses (MOALI, 2017). Small-scale aquaculture has potential to contribute to this goal, but strict land use regulations. With these factors in mind, we set out to estimate and compare the size of contributions to the rural economy (directly through farm incomes plus indirect spillovers) made by: (1) paddy-based agriculture; (2) small-scale aquaculture; and (3) large-scale aquaculture. To estimate these contributions we built a Local Economy-wide Impact Evaluation (LEWIE) model of the main fish-farming townships in the Ayeyarwady Delta (See Figure 1). The model was calibrated using data from a representative survey of crop farming, fish farming and non-farm households. The model shows that, compared to crop farming, aquaculture generates: (1) higher returns per acre of land; and (2) larger spillovers within the local economy. These spillovers particularly benefit landless wage workers. While small-scale fish farms are currently less productive than larger farms, they make more use of local inputs, especially labor from landless households, and generate spillovers on par with large farms. With targeted support, small-scale aquaculture could make important contributions to rural economic growth and poverty reduction. These results suggest that policies recognizing and promoting the contributions of small fish farms to the rural economy could stimulate more inclusive rural development. But institutional support to smaller fish farms has historically been limited or non-existent. Based on these findings, we recommend a two-pronged strategy to promote rural economic growth and improve livelihoods: (1) allow and encourage the expansion of small fish farms - rather than large fish farms - by permitting smallholders freedom to farm land to which they possess use rights in any way that they choose; and (2) make investments that improve the efficiency of small fish farms to raise their productivity and profitability.