ANALYSIS OF THE TECHNICAL EFFICIENCY OF EUROPEAN SEA BASS FARMS IN TURKEY: A STOCHASTIC FRONTIER PRODUCTION FUNCTION APPROACH

Authors

DOI:

https://doi.org/10.20950/1678-2305/bip.2021.47.e642

Keywords:

aquaculture, economic analysis, inefficiency, seabass, subsidy, Turkey.

Abstract

This study’s main objective was to estimate sea bass farms’ technical efficiency and determine the factors affecting production inefficiency using the stochastic frontier approach. The data were collected using questionnaires from 71 farms in 2017. The total sea bass production cost was calculated 5.35 $ kg-1, income 5.65 $ kg-1, gross profit 0.30 $ kg-1. The proportion of variable costs (84.25%) in total costs was higher than the fixed costs (15.75%). The feed cost (57.56%) was the influential primary variable on the total costs, and the benefit-cost ratio was 1.06. The results indicated that seabass farms’ technical efficiency varied between 0.67 to 1.00, and the average was 0.82. The efficiency scores meant the farms could achieve the same production amount by reducing inputs by 18%. One per cent increase in resale value, feed amount, and fingerling amount, increase sea bass production by 0.4%, 0.4%, and 0.2%, respectively. Fish loss rates and subsidies were influential on inefficiency. It would be beneficial to minimize risk factors such as fish loss rates and carry out political and educational activities to improve farms’ infrastructure in breeding and marketing. As a result, policymakers should also include the effective use of production factors in the design of aquaculture subsidy policies.

References

Aigner, D.J.; Lovell, C.A.K.; Schmidt, P. 1977. Formulation and estimation of stochastic frontier production models. Journal of Econometrics, 6(1): 21-37. https://doi.org/10.1016/0304-4076(77)90052-5.

Ajiboye, B.O.; Adeyonu, A.G.; Bamiro, O.O.; Owolabi, A.O.; Shoyombo, A.J. 2019. Productive efficiency of fish production as a panacea for economic recession among farming household in South-West, Nigeria. Agricultural Journal, 14(2): 20-24. https://doi.org/10.36478/aj.2019.20.24.

Aktar, S.S.; Khan, M.A.; Prodhan, M.M.; Mukta, M.A. 2018. Farm size, productivity, and efficiency nexus: The case of pangas fish farming in Bangladesh. Journal of the Bangladesh Agricultural University, 16(3): 513-522. https://doi.org/10.3329/jbau.v16i3.39449.

Ashley-Dejo, S.S.; Adelajao, A.; Idi-Ogede, A.M.; Omoniyi, I.T.; Olaoye, O.J. 2020. Economic efficiency and profitability of fish hatchery enterprises in Osun State, Nigeria. Nigerian Agricultural Journal, 51(2): 337-345.

AydoÄŸan, M.; Uysal, O.; Candemir, S.; Terzi, Y.E.; TaÅŸçı, R.; BeÅŸen, T.; í­–ztürk, F.P.; Emre, M.; Eralp, í­–.; Gündüz, O.; Ceyhan, V. 2020. Economic performance of rainbow trout farming in Turkey. Turkish Journal of Agriculture-Food Science and Technology, 8(9): 1952-1964. https://doi.org/10.24925/turjaf.v8i9.1952-1964.3587.

Baruwa, O.I.; Omodara, O.D. 2019. Technical efficiency of aquaculture system in Oyo State, Nigeria: Stochastic frontier approach. Journal of Aquatic Research and Marine Sciences, 2(1): 114-120. https://doi.org/10.29199/ARMS.201026.

Battese, G.E.; Coelli, T.J. 1995. A model for technical inefficiency effect in stochastic frontier production for panel data. Empirical Economics, 20: 325-332. https://doi.org/10.1007/bf01205442.

Battese, G.E.; Corra, G.S. 1977. Estimation of production function model with application to the pastoral zone of eastern Australia. Australian Journal of Agricultural Economics, 21(3): 169-179. https://doi.org/10.1111/j.1467-8489.1977.tb00204.x.

Berger, A.N.; Humphrey, D.B. 1997. Efficiency of financial institutions: international survey and directions for future research. European Journal of Operational Research, 98(2): 175-212. https://doi.org/10.1016/S0377-2217(96)00342-6.

Bonfiglio, A.; Henke, R.; Pierangeli, F.; Pupo D’Andrea, M.R. 2020. Effects of redistributing policy support on farmers’ technical efficiency. Agricultural Economics, 51(2): 305-320. https://doi.org/10.1111/agec.12556.

BozoÄŸlu, M.; Ceyhan, V. 2009. Energy conversion efficiency of trout and sea bass production in the Black Sea, Turkey. Energy, 34(2): 199-204. https://doi.org/10.1016/j.energy.2008.12.001.

CBRT. 2020. Indicative Exchange Rates 1950-2020. Central Bank of the Republic of Turkey Head Office. Available at: <https://evds2.tcmb.gov.tr/index.php?/evds/serieMarket/#collapse_2> Accessed: Nov. 9, 2020.

Ceyhan, V.; Gene, H. 2014. Productive efficiency of commercial fishing: evidence from the Samsun Province of Black Sea, Turkey. Turkish Journal of Fisheries and Aquatic Sciences, 14: 309-320. https://doi.org/10.4194/1303-2712-v14_2_02.

Cinemre, H.A.; Ceyhan, V.; BozoÄŸlu, M.; Demiryürek, K.; Kılıç, O. 2006. The cost efficiency of trout farms in the Black Sea Region, Turkey. Aquaculture, 251(2-4): 324-332. https://doi.org/10.1016/j.aquaculture.2005.06.016.

Coelli, T. 1995. Recent developments in frontier estimation and efficiency measurement. Australian Journal of Agricultural Economics, 39(3): 219-245. https://doi.org/10.1111/j.1467-8489.1995.tb00552.x.

Coelli, T. 1996. A Guide to Frontier Version 4.1: A computer program for stochastic frontier production and cost function estimation. Armidale: CEPA Press. 33p.

DaÄŸtekin, M.; Uysal, O.; Candemir, S.; Genç, Y. 2021. Productive efficiency of the pelagic trawl fisheries in the Southern Black Sea. Regional Studies in Marine Science, 45: 101853. https://doi.org/10.1016/j.rsma.2021.101853.

Emokaro, C.O.; Ekunwe, P.A.; Achille, A. 2010. Profitability and viability of catfish farming in Kogi State, Nigeria. Research Journal of Agriculture and Biological Sciences, 6(3): 215-219.

FAO í  Food and Agriculture Organization of the United Nations. 2016. The state of world fisheries and aquaculture 2016: Contributing to food security and nutrition for all. Rome: FAO. 200p. Available at <http://www.fao.org/3/a-i5555e.pdf> Accessed: Dec. 12, 2020.

Farrell, M.J. 1957. The measurement of productive efficiency. Journal of the Royal Statistical Society. Series A (General), 120(3): 253-281. https://doi.org/10.2307/2343100.

Fernández Sánchez, J.L.; Llorente Garcí­­a, I.; Luna, M. 2020. Technical efficiency of sea bass and sea bream farming in the Mediterranean Sea by European firms: a stochastic production frontier (SPF) approach. Aquaculture Economics & Management, 24(4): 526-539. https://doi.org/10.1080/13657305.2020.1840660.

Filli, F.B.; Audu, I.A.; Ukpe, H.U. 2016. Econometrics of fish production in three local government of Adamawa State, Nigeria. FUW Trends in Science & Technology Journal, 1(1): 233-237.

Halwart, M.; Funge-Smith, S.; Moehl, J. 2003. The role of aquaculture in rural development. In: FAO í  Food and Agriculture Organization of the United Nations. Review of the State of World Aquaculture. FAO Fisheries Circular, no. 886, rev. 2., p. 47-58. Available at: <http://www.fao.org/3/y4490e/y4490e04.pdf> Accessed: Nov. 14, 2020.

Hishamunda, N.; Ridler, N.B.; Bueno, P.; Yap, W.G. 2009. Commercial aquaculture in Southeast Asia: some policy lessons. Food Policy, 34(1): 102-107. https://doi.org/10.1016/j.foodpol.2008.06.006.

Iliyasu, A.; Mohamed, Z.A.; Ismail, M.M.; Amin, A.M.; Mazuki, H. 2016. Technical efficiency of cage fish farming in Peninsular Malaysia: a stochastic frontier production approach. Aquaculture Research, 47(1): 101-113. https://doi.org/10.1111/are.12474.

Janssen, K.; Berentsen, P.; Besson, M.; Komen, H. 2017. Derivation of economic values for production traits in aquaculture species. Genetics, Selection, Evolution., 49(5): 1-13. https://doi.org/10.1186/s12711-016-0278-x.

KeleÅŸtemur, G.T.; Uslu, A.A. 2017. Use of new nutrition materials in fish feeding. International Journal of Innovative Engineering Applications, 1(1): 23-26.

Kıral, T.; KasnakoÄŸlu, H.; Tatlıdil, F.; Fidan, H.; GündoÄŸmuÅŸ, E. 1999. Cost calculation methodology and database guide for agricultural products. Ankara: Agricultural Economics Research Institute. Publication, no. 37, 143p.

Kopp, R.J.; Smith, V.K. 1980. Frontier production function estimations of steam electric generation: a comparative analysis. Southern Economic Journal, 46(4): 1049-1059. https://doi.org/10.2307/1057240.

Maaruf, H.T.; Akbay, C. 2020. Economic analysis of fish farming in the northern region of Iraq. Journal of Agriculture and Nature, 23(5): 1257-1269. https://doi.org/10.18016/ksutarimdoga.vi.692756.

McDaniels, T.; Longstaff, H.; Dowlatabadi, H. 2006. A value-based framework for risk management decisions involving multiple scales: a salmon aquaculture example. Environmental Science & Policy, 9(5): 423-438. https://doi.org/10.1016/j.envsci.2006.03.005.

Meeusen, W.; Van Den Broeck, J. 1977. Efficiency estimation from Cobb-Douglas production functions with composed error. International Economic Review, 18(2): 435-444. https://doi.org/10.2307/2525757.

Minviel, J.J.; Latruffe, L. 2017. Effect of public subsidies on farm technical efficiency: a meta-analysis of empirical results. Applied Economics, 49(2): 213-226. https://doi.org/10.1080/00036846.2016.1194963.

Mkuna, E.; Baiyegunhi, L.J. 2019. Analysis of the technical efficiency of Nile perch (Lates niloticus) fishers in the Tanzanian portion of Lake Victoria: a stochastic frontier analysis. Lakes & Reservoirs, 24(3): 228-238. https://doi.org/10.1111/lre.12274.

Namonje-Kapembwa, T.; Samboko, P. 2020. Is aquaculture production by small-scale farmers profitable in Zambia? International Journal of Fisheries and Aquaculture, 12(1): 6-20. https://doi.org/10.5897/IJFA2019.0737.

Nash, C.E.; Iwamoto, R.N.; Mahnken, C.V. 2000. Aquaculture risk management and marine mammal interactions in the Pacific Northwest. Aquaculture, 183(3-4): 307-323. https://doi.org/10.1016/S0044-8486(99)00300-2.

Newbold, P. 1995. Statistics for business & economics. 4th ed. Upper Saddle River: Prentice-Hall. 792p.

Official Gazette. 2015. Support communique for fishery products. Presidency of The Republic of Turkey. [online] URL: <https://www.resmigazete.gov.tr/eskiler/2015/05/20150524-9.htm>

Onumah, E.E.; Onumah, J.A.; Onumah, G.E. 2018. Production risk and technical efficiency of fish farms in Ghana. Aquaculture, 495: 55-61. https://doi.org/10.1016/j.aquaculture.2018.05.033.

Sharma, K.R.; Leung, P.; Chen, H.; Peterson, A. 1999. Economic efficiency and optimum stocking densities in fish polyculture: an application of data envelopment analysis (DEA) to Chinese fish farms. Aquaculture, 180(3-4): 207-221. https://doi.org/10.1016/S0044-8486(99)00202-1.

Sharma, T.; Dhakal, S.C.; Kattel, R.R.; Gharti, K.; Lamichhane, J. 2018. Economics of fish production at Chitwan district, Nepal. Journal of Agriculture and Natural Resources, 1(1): 21-31. https://doi.org/10.3126/janr.v1i1.22219.

Subasinghe, R.P. 2003. An outlook for aquaculture development: Major issues, opportunities and challenges. in Review of the state of world aquaculture. Rome: FAO Fisheries Department/FAO í  Food and Agriculture Organization of the United Nations. vol. 886. Available at: <http://www.fao.org/3/y4490E/y4490E02.pdf> Accessed: Nov. 16, 2020.

Theodoridis, A.; Batzios, C.; Ragkos, A.; Angelidis, P. 2017. Technical efficiency measurement of mussel aquaculture in Greece. Aquaculture International, 25(3): 1025-1037. https://doi.org/10.1007/s10499-016-0092-z.

Tunde, A.B.; Kuton, M.; Oladipo, A.A.; Olasunkanmi, L.H. 2015. Economic analyze of costs and return of fish farming in Saki-East Local Government Area of Oyo State, Nigeria. Journal of Aquaculture Research & Development, 6(2): 306. https://doi.org/10.4172/2155-9546.1000306.

TurkStat. 2019. Fishery statistics. Turkish Statistical Institute. [online] URL: <https://biruni.tuik.gov.tr/medas/?kn=97&locale=tr>
TurkStat. 2020. Fishery statistics. Turkish Statistical Institute. [online] URL <https://data.tuik.gov.tr/Kategori/GetKategori?p=tarim-111&dil=1>

Vinh, N.P.; Huang, C.T.; Hsiao, Y.J.; Hieu, T.K.; Chen, L.H. 2020. Data envelopment analysis for production efficiency improvement: An empirical application on brine shrimp Artemia Franciscan culture in the Mekong Delta, Vietnam. Aquaculture Research, 51(7): 2985-2996. https://doi.org/10.1111/are.14636.

Yin, X.; Zhu, X.; Zhou, H.; Li, Z.; Wang, A.; Liao, X. 2017. Technical efficiency of carp polyculture production in Jiangsu, China: a ray stochastic frontier production approach. Aquaculture Research, 48(4): 1629-1637. https://doi.org/10.1111/are.12998.

Downloads

Published

2021-10-13

Issue

Section

Scientific Article