Patil, Pawan Ganapati
(1999)
Modelling and measuring the efficiency of the brackishwater shrimp aquaculture sector and its socio-economic and environmental impacts on rural producers in Nellore District, India.
PhD thesis, London School of Economics and Political Science.
Abstract
The lack of economic analysis on export-led shrimp farming in India has become of major national importance as a result of the Indian Supreme Court's December 1996 decision to ban the shrimp farming sector. The ban was a direct result of concerns over the impact of shrimp farming-in terms of its degradation of the environment and marginalization of local people from coastal resources. In addition to questions raised with respect to the nature and extent of environmental and socio-economic externalities of this sector, recent parliamentary debate raised equally important questions regarding the sustainability of shrimp farming under a variety of production methods. However, assessment of the productive efficiency of shrimp farms under increasingly intensive production methods is lacking. Parametric and non-parametric approaches to measuring the productive efficiency of shrimp farms are applied to farm-level data collected from the Kandaleru region in India. First, technical efficiency is modelled, measured and explained by estimating a restricted translog stochastic frontier production function using maximum-likelihood methods. The variation of technical efficiency indices across the shrimp farm sample is explained using farm specific characteristics and managerial variables. Farm mechanisation, location and size are found to be significant factors explaining total inefficiency. Second, scale effects are extracted from the total efficiency index by applying Data Envelopment Analysis techniques. An inverse relationship is found to exist between farm size and efficiency. Next, social and environmental impacts facing rural inhabitants as a result of the shrimp farming sector's growth and development are assessed using primary survey data collected from twenty-six villages located adjacent to shrimp farms. The most frequently cited problem by local inhabitants is blocked access to public areas. This is followed by problems of agricultural land salinity, well water salinity, unemployment, fodder & fuelwood collection problems and health problems, respectively. The immediate policy direction is clear: larger farmers could reduce the intensity of production to maximise efficiency and minimise input slacks to reduce the risk of environmental degradation both within the aquatic pond environment and to the natural ecosystem. Similarly, they could enable free but supervised access through their farms to public areas such as the Bay of Bengal, Kandaleru creek or public pasture lands.
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