economics of philippine fisheries and aquatic resources

225 Pages·2014·4.41 MB·English

ECONOMICS OF
PHILIPPINE FISHERIES
AND AQUATIC RESOURCES:
A LITERATURE SURVEY
Marian S. delos Angeles, Ernesto P. Gonzales,
Ramyleo Pelayo and Lota A. Ygrubay
WORKING PAPER SERIES NO. 90-17
July 1990
Philippine Institute for Development Studies
TABLE OF CONTENTS
I. Introduction -1-
A. The Aquatic Resource Base 1
B. Objectives and Scope of the Study 1
II. An Economic Conceptual Framework for Analyzing Policy
issues in Philippine Fisheries and Aquatic Resource
Management 2
A. Basic Microeconomics of an Aquatic Resource System.. 2
B. Limited Entry Schemes: Factors to Consider 6
C. interphase with Macroeconomic Conditions 8
III. Literature Survey 8
A. Marine (Capture) Fisheries 8
1. Data requirements for limiting entry into
capture coastal fisheries 15
2. Encouraging entry into commercial fisheries .... 18
3. Prescribing less destructive fishing techniques. 18
4. Restoring the productivity of fishery habitat .. 19
5. Importance of examining determinants of direct
production costs and allocation of rents 19
6. Measuring economic rent and environmental costs ... 20
B. Aquaculture Fisheries 21
1. Socio-economic Studies 21
2. Project Evaluation Studies 22
3. Input-Output Analysis 22
4. Technology Adoption 24
5. Societal Considerations 25
C. Inland Fisheries 26
D. Intersectoral and Macroconcerns 26
1. Credit support 26
2. Assessing alternative management schemes:
the need for a framework 27
3. Valuing the importance of FARP at the macrolevel 28
IV. Summary and Recommended Research Priorities 28
Bibliography 223
Figure 1 Optimum Level of Resource Development 4
LIST OF TABLES AND ANNEXES
Table 1 Problem Areas for Comparing Management Schemes 7
2 Studies on Capture Fisheries 9
3 Economic Indicators of Selected Aquaculture Studies.. 23
4 Selected Indicators on Philippine Fisheries 29
5 Coverage of Studies Inventoried 32
Annex I Appendix Table 1
Philippine Aquaculture Studies: Summary of Findings.. 36
II Abstracts
Inland Fisheries 77
Aquaculture 85
Marine Fisheries 136
ECONOMICS OF PHILIPPINE FISHERIES AND AQUATIC RESOURCES:
A LITERATURE SURVEY
Marian S. delos Angeles,
Ernesto P. Gonzales, Ramyleo Pelayo
and Lota A. Ygrubay*
I. INTRODUCTION
A . The Aquatic _Re30_urce Base
The Philippines, being archipelagic in nature, has a water
resource area that is many times larger than its land area, and
a coastline of 17,460 km. About 82 percent of its provinces
border on the sea and of the more than 1,500 municipalities,
nearly 65 percent are coastal. Thus, about 55 percent of the
population reside along coastal areas and a significant propor-
tion of the rural population depend on fishing for livelihood. As
a country that counts as the second largest archipelago in the
world with .over 7,100 islands, the Philippines' aquatic resources
should be considered a significant factor in planning for
national and regional development.
B . Objectives_and_5cope_of the Study
The general objectives of this study are: (1) to review
literature on the Philippine experience in fisheries and aquatic
resources management; and (2) to identify data gaps and
prioritize issues where more research is necessary. This paper
*The authors are Research Fellow, Research Associates and
Senior Research Assistant, respectively, of the Pnilippine
Institute for Development Studies (PIDS). Research funds from the
USAID and staff support from Pilipinas Felix, research assistant
and Susan Pizarro, secretary, of PIDS are gratefully acknowledged.
2
also aims to provide basis for a component of the Research
Program on the Economics of Natural Resource and Environmental
Policy of the Philippine Institute for Development Studies
(PIDS), an economic, policy-oriented research institution. The
present focus is thus on the economic aspects of selected policy
issues in fisheries and aquatic resource management in the
Philippines (FARP).
An economic framework for looking at FARP management is
first presented (Part 2), through which existing studies are
reviewed (Part 3). Research gaps are subsequently identified and
some prioritization is made on those that may be addressed by
PIDS (Part 4) .
II. AN ECONOMIC CONCEPTUAL FRAMEWORK FOR ANALYZING POLICY ISSUES
IN PHILIPPINE FISHERIES AND AQUATIC RESOURCE MANAGEMENT
We provide a conceptual framework for examining issues in
FARP in terms of analytical tools of resource and environmental
economics. This is done for two reasons: (a) to specifically
factor in certain peculiarities of the Philippine aquatic
resource system, and (b) to complement the fisheries-specific
analytical framework that generally characterizes fisheries
economics literature.
A B a s ic Microeconomics of an Aquatic Resource System
Whereas fishery biologists have prescribed maximum sustained
yield management for fisheries, the application of fishery
economic concepts for determining effort levels and hence catch
levels, means lower harvest rates than implied by biological
concerns. The more conservation-oriented, economic principle for
sustained yield management considers not only fish output (and
gross revenue) but also accounts for the factors of production
required for catching fish which need to be paid for, or which
have alternative uses. The maximum economic yield (MEY)
criterion, where the difference between total revenue and total
catch cost is maximized, thus results in lower fish production
level as opposed to maximization of biological yield alone.
Thus, contrary to the popular notion of discordance between
economic principles and fishery resource conservation, the
economic solution to fishery management is expected to result in
a more conservation-oriented management.
Notwithstanding such economic optimization, however,
certain conditions governing fishery use do lead to non-
sustainable fish catch. Foremost is the fugitive nature of the
fish and the often uncontrolled open access nature of fisheries
which does not assure prudent fishermen of their own future
harvest, thereby encouraging overexploitation. This implies that
for current fishing to be conservation-oriented, commonly-drawn
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rule-making and implementation are particularly marked in this
resource's management.
Second, while dissipation of economic rent that arises from
overfishing should encourage exit from the industry towards other
economic activities, this does not usually occur under
conditions of high unemployment and lack of alternatives (Clark
1973). The eventual result therefore is subsistence fishing in
most less developed countries.
Moreover, from the public perspective, three types of costs
are incurred in fishery resource-based activities, namely: (a)
the expenses paid on complementary production inputs such as
labor and fuel for running motorized boats or private costs; (b)
future costs that result from using a smaller resource stock or
user cost; and (c) those that result from negative effects of the
activity on the rest of the resource system or environmental
cost. These costs are important in the following manner:
(1) private costs are directly borne by the current
producer and depend on his decisions cn input
combinations;
(2) user costs are experienced by future users who need
not be identical with the current user particularly if
the latter are not assured of future access to the same
resource; and
(3) environmental costs may be borne by other types of
resource users, either at present or in the future,
depending on the severity of impact on the rest of the
ecosystem.
A public decisionmaker who ideally considers the future
generation's welfare and the other resource users' benefits
should account for all three types of costs while deciding on how
much to produce. He is expected to encourage private
decisionmakers to act in accordance with societal considerations
through various intervention mechanisms.
Maximizing society's welfare implies producing at level
F(s), the equilibrium quantity for the social marginal cost and
demand curves indicated in Figure 1. On the other hand, for a
private resource user who is not certain that he will have future
access to the aquatic resource (particularly with fugitive
fishery resources), and who is not concerned with the other
commodities/services that may be derived from the resource
system, only current, direct production cost matters; his
preferred production rate is thus F(p), where private, marginal
cost alone is relevant. Somewhere in-between the two is a
4
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private/public choice F(e), where'both private and environmental
costs are considered but future costs are ignored. 1/
An extension of this single decisionmaker-specific framework
to the industry aggregate, and to society in general, may be
derived through the usual aggregation of individual supply
(marginal cost) curves. From the public perspective, the cost of
supplying an aquatic resource-based product is thus higher ^if
more damage is simultaneously inflicted on the environment.
From this framework, we note that to approximate socially
desirable decisionmaking, the following should be considered:
1. Accounting for all factors of production - this implies
that measurement of human, capital, and natural resource
systems is necessary for proper incorporation
by public decisionmakers of the effects on the
ecosystem.
2. Such an accounting should allow the measurement of all
costs of resource use and their incidence to provide
basis for decisions on how the resource system should be
allocated. Identification of the key parties involved,
their behavior, and the nature of benefits and costs
they bear is a requisite to optimum policy formulation.
3. Among the key mechanisms for encouraging private
decisionmakers to act in a socially optimal manner are:
(a) the restriction of access to decrease the number of
resource users and enable a limited number to capture
gains from reduced future user costs arising from higher
resource stocks [moving from F(p) to F(e) in Figure 1];
(b) the encouragement for joint decisionmaking in
managing common property-type of resources through
organization-building that would lower the costs of
obtaining information, of bargaining, and of enforcing
the rules so derived; and
(c) the use of appropriate resource pricing to
encourage resource users to reckon with future scarcity
and internalize negative, environmental effects [moving
from F (e) to F (s) ] .
Specific conditions of FARP indeed necessitate that this
broader analytical framework be employed to supplement the usual
1/
An example of such a private decisionmaker is a fisherman
who harvests several types of fishery products but who considers
the value of the resource only within his lifetime; a myopic
public decisionmaker would also behave similarly.
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fisheries economic framework. First, the size of Filipino
population using FARP, its dispersed geographic location, and the
extent of Philippine marine areas require that localized,
commonly decided management regimes supplement/ and possibly
dominate, national-level agencies tasked with enforcing rules and
regulations. Second, the diversity of the country's living
aquatic resources implies that significant synergistic relation-
ships are involved in any form of FARP-use.
Thus, attention needs to be paid to the private costs and
benefits of fishery use as well as to the scarcity and
environmental effects among the various Philippine fisheries and
aquatic-based activities.
B. Limited Entry Schemes: Factors to Consider
Economic solutions to overfishing and misuse of aquatic
resources differ from the traditional management strategies
(e.g., of gear prescriptions, fishing reasons) in that they seek
to limit entry to capture fisheries by modifying input and output
prices. Examples of these are (a) direct price modification
through either a tax on output such as a landings tax or a tax on
input such as an effort tax, and/or (b) restrictions pn quantity
of output through bidding of fisherman's quota, or controlling of
input by issuing licenses to effort shares as summarized by
Anderson (1980). On the other hand, standard fishery regulatory
tools have focused on prescription of specific technologies,
fishing area restrictions and catch season limitations.
Application of limited entry schemes, whether as complements
to traditional fishery regulation or as alternatives would depend
on a number of concerns. These include those summarized by
Anderson (1980) in relation to the author's examination of
limited entry schemes which we reproduce as Table 1 and which
reflect both private and social concerns that were earlier noted.
*
Appropriateness of management schemes would depend on the
local conditions governing resource use. For example, some of
the issues are discussed by Panayotou (1982) who notes that
while economic controls of tax on effort and catch and license
fees may aim to indirectly control fishing effort by directly
removing the resource rent, taxes may be counter-distributive as
they usually transfer benefits from the low income (where most
small-scale fishermen belong) to the average income group.
Licenses, on the other hand, tend .to be auctioned off to the most
efficient operators with access ,to-capital.
With respect to fishing quotas which aim to improve the
productivity of the stocks by maintaining a desired level of
production these may result in negative socio-economic
impacts as fishermen successively expand their catching capacity
particularly to increase share of quota that is usually based on
historical catch levels. The eventual result could be increased
fishing costs while the resource rents are completely dissipated.
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Table 1
PROBLEM AREAS FOR COMPARING MANAGEMENT SCHEMES
Management Operations
1. implementation
2. flexibility
3. other types of regulation
4. intrafishery conflicts
5. multi-purpose fleet problems
Socio-economic Effects
6. distribution
7. general effects on prices & employment
Biological Effectiveness
8. capability of achieving goals
9. interdependent species
Economic Efficiency
10. vessel and fleet operating efficiency
11. technological advance
12. research and regulation costs
13. freedom on individual participants
Source: Anderson (1980), Figure 2, p. 51.