Give Someone a Fishpond Modeling the Impacts of Aquaculture in the Rural Economy

The rapid growth of fish farming over the past three decades has generated heated debates over the place of aquaculture in rural development. Central to these debates is the question of whether and how aquaculture impacts local incomes and employment, yet little empirical evidence exists on the issue. To address this question, we propose a Local Economy-wide Impact Evaluation (LEWIE) model which nests fish farm models within a general-equilibrium model of their local economy. The model is calibrated using primary data collected from 1102 households in Myanmar s main aquaculture zone, representative of 60% of the country s aquaculture. Using this model, we examine the impact of aquaculture on the incomes and labor market outcomes of fish farming households, but also crop farms and non-farm households in the cluster. Simulating one-acre increases in pond/plot surface we find that: (1) aquaculture generates much higher incomes per-acre than agriculture; (2) aquaculture generates larger income spillovers than agriculture for non-farm households, by way of retail and labor markets; (3) small commercial fish farms generate greater spillovers than large fish farms. These results bolster the notion that fish-farming, notably small-scale commercial aquaculture, may have a significant role to play in rural development and poverty reduction. Acknowledgement : This research was made possible by the support of the United States Agency for International Development (USAID) funded Food Security Policy Project (Associate Award No. AID-482-LA-14-00003), and financial assistance from the Livelihoods and Food Security Trust Fund (LIFT) Grant Support Agreement Number: R 1.4/029/2014 for the project Agrifood Value Chain Development in Myanmar: Implications for Livelihoods of the Rural Poor . We also thank Mekamu Kedir Jamal of the International Food Policy Research Institute for assistance with analysis of satellite imagery and mapping.