Economic Performance Of Tilapia Farming In Southern China

Tilapia has become one of the major species of aquatic products in close link with both domestic and international markets. Nowadays, the demand for fish and fisheries product has been exacerbated by the continued increase in human population the world over. This was due to the fact that, global captured fishery was declining following the increased human exploitation for the commercially important fishes. Aquaculture or fish farming has become one of the solutions to maintaining the continuous supply of fish to commercial markets. China was by far the largest producer and exporter of tilapia products irrespective of some constraints including soaring production costs, price and weather fluctuations. In the country, tilapia production is mostly carried out in the southern coastal areas where subtropical conditions favored the growth and reproduction of the species.This research examined the effect of some socio-economic variables on Tilapia culture production practice, economic viability and production efficiency of Tilapia production in 4 major provinces in southern China namely; Guangdong, Hainan, Guangxi, and Fujian. A cross sectional data was obtained from farmers using structured questionnaire. The Result revealed that, a total of 102 farmers selected from the four provinces were represented by all males. The age bracket of fish farmers ranged between 31-50 yrs. About 96% farmers had a sort of education, ranging from primary to tertiary level. The majority of the farmers in this study area had 5-10yrs of farming experience. Most house hold had 3-4 member size in most of the provinces. The farming area ranged from<1,>1-3,>3-5 and>5 (ha) respectively. Guangxi province had the largest surveyed proportion of farmers (49%), while Guangdong had the largest proportion of farming area (659.7ha). Tilapia farming is being practiced in culturing system such as ponds, reservoir and cages. The most common culturing model for tilapia was monoculture (54.9%), followed by Polyculture (37.3) and Integrated (7.8%).The impact of land size on Benefit-Cost Ratio (BCR) and the Return on Sales (ROS), estimates on the effect of inputs on Tilapia output using regression analysis as well as production efficiency were evaluated. Production cost, revenue and profit increased with farming scale. The BCR for farms less than 1 ha was 1.35 whiles that for 1-3 ha,3-5 ha and above 5 ha were 1.72,1.73 and 2.13 respectively. Meanwhile, ROS for farms less than 1 ha, 1-3 ha,3-5 ha and above 5 ha were 25%,41%,42% and 53% respectively. The unit profit return increase with increased price. The Cobb-Douglas equation fitted the data well as indicated by the R2 value estimates of 81.5%. The farming area, seed and lease inputs were statistically significant with positive coefficients of 0.293,0.424, and 0.406 respectively. Based on BCR and ROS indicators, it can be concluded that tilapia production in the four provinces is economically rewarding and profitable.Production efficiency of tilapia farming at provincial farm levels of tilapia production venture was further assessed, using variable return to scale of Data envelopment analysis (VRS DEA), multistage input-oriented approach. The results showed that the constant return to scale technical efficiency (CRSTE) for Guangdong ranged from 0.623 to 1,0.044 to 1 for Hainan,0.452 to 1 for Fujian and 0.284 to 1 for Guangxi. The smallest inefficient variable return to scale technical efficiency (VRSTE) was 0.385,0.715 and 0.881 Guangxi, Fujian and Guangdong. The scale inefficiency was 0.044,0.633,0.737,0.912 and 0.986 for Hainan, Fujian, Guangxi, and Guangdong. The Technical efficiency was further decomposed into overall technical efficiency (OTE), pure technical efficiency (PTE) and Scale efficiency. A total of 78 out of 102 (76%) farms attained the PTE score of 1 and lie on the efficient frontier based on the VRS assumption. A total of 44 farms were fully efficient, operating at most productive scale size and experiencing CRS. Guangdong was fully efficient with the mean score of 1 at farm size of<1(ha), Hainan at 1-3 (ha) and Guangxi 3-5(ha). The lowest mean inefficient score was 0.54 obtained from the<1(ha) farm size. Production and marketing systems of tilapia in China showed that tilapia products produced had to pass through different channels before reaching their final end user (consumers). Major international markets for tilapia products produced in China included among others, the United State, European Union and Russia. So far there is not at this time a lot of research on economic fitness of tilapia farms in China (the major producer in the world), so this research would be a valuable contribution to the scientific literature on tilapia culture in China. This work will further guide potential investors and competitors for tilapia market in China and the world at large.