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7. Technique of production and average yields

Although the basic techniques of milkfish production which rely on lab- lab and lumut as feed rather than plankton, have remained essentially unchanged over the years, relative intensities of inputs used have changed. These changes are sometimes incorrectly perceived as different techniques when they are really only differences in input combinations. For example, the more progressive farmers, who move their fish at regular intervals from one rearing compartment to another as they grow so as to more closely align stocking densities with pond-carrying capacity, depend on labdab or lumut. Moving enriched water to rearing ponds from "kitchen" ponds, where natural feeds are grown, also does not represent a change in technique.

In this paper, only the conventional technique which relies on lab-lab or lumut, and which is common to most farms, is examined. Homogeneity of husbandry practices for the sample is required in order to specify a theoretically meaningful input-output relationship from the various input and output data collected from each farm.

The conventional technique of milkfish production in the Philippines involves the application of inputs such as organic fertilizers to the pond bottom before stocking to increase the nutrient content of the pond to encourage the growth of algae. In contrast, Taiwanese techniques rely primarily on supplementary feeding instead of growing fishfood in the pond. Producers there are also beginning to experiment with two to three metre-deep ponds in hopes of increasing production per unit of land area, which is more scarce than in the Philippines.

In the Philippines, pesticides are sometimes used to eradicate pests and predators. Pond preparation including soil conditioning and fertilization takes about one to two weeks, followed by regular maintenance of the dikes, embankments, and gates. The success of Philippine milkfish culture is heavily dependent on the growth of various algae since direct feeding is not widely practiced. These algae can be either filamentous green, blue-green microbenthic or planktonic. The three types of algae are depth-dependent: Planktonic forms require deep water; filamentous green and blue-green microbenthic forms can grow in shallow ponds. Tang,50 has shown that ponds with average depths of less than 70 cm (typical of most Philippine ponds) can only be managed profitably by using filamentous green or blue green microbenthic algae as fishfood, because the quantity of plankton produced is insufficient to support a high level of fish production. Thus, either filamentous green or bluegreen microbenthic algae is the biological basis of milkfish production in the Philippines, here referred to as the conventional technique.

TABLE 12. Per-Hectare Yield of Milkfish Farms by Province, the Philippines, 1978

Note: High yields and low yields have been defined relative to the average yield. Those farms with aboveaverage yield are grouped as high-yielding farms and those with below-average yield are grouped as low-yielding farms.

TABLE 13. Per-Hectare Yield of Milkfish Farms by Size and by Province, 1978

TABLE 14. Farm Yields per Hectare by Province, as a Percentage of the Total, 1978

Our survey data show that average annual milkfish production per hectare from intensively operated farms is approximately 760 kg. This estimated yield is higher than the reported national average of 650 kg per hectare per year because the survey data consists of production data only from farms using inputs. With proper husbandry and management, milkfish yield can be increased to at least two tonnes, about three times higher than the present average. It can be inferred that if increases in output are to come from hectarage expansion, it will require two additional hectares of land to produce the additional 1.4 tonnes of milkfish which could be produced in one hectare with proper management and husbandry techniques. Which of the two alternatives would be more profitable depends upon the relative costs of land vis-a-vis other supplementary inputs. In this connection, the low leasehold fees for government land may have partly contributed to the observed bias of producers to favour hectarage expansion over production intensification. This question is not definitively answered in this paper; however, available data are used to determine if existing farms could increase their profits by increasing the input quantities applied.

Geographical differences in yield can provide a picture of variations among milkfish farms in the Philippines. To estimate the annual milkfish production per hectare, the total reported production is divided by the total active farm size; undeveloped area within the farm is excluded.⁵¹ Of the seven provinces, the lowest average per hectare yield was found in Masbate Province and the highest averages found in lloilo and Bulacan provinces (table 12). The contrast between the yields of high-yielding and low yielding farms is significant. The average yield of highyielding farms in three of the seven provinces (Cagayan, Masbate, and Zamboanga del Sur) is even lower than the average yield of the lowyielding farms in Bulacan and lloilo. Note also that the average yields in the low-yielding farms in Cagayan, Masbate, Bohol, and Zamboanga del Sur do not even reach 200 kg.

Yield differences among small, medium, and large farms are also significant (table 13). In general, there is a trend of yield increases with an increase in farm size. Wide variations in productivity of individual milkfish farms are also noticeable. For example, the highest yield recorded for any one farm among the high-yielding farms in each province ranges from 1,111 kg per hectare per year in Masbate to 3,472 kg per hectare per year in Bulacan.

Increasing productivity per hectare as farm size increases was evident in the major production centres of Pangasinan, Bulacan, lloilo, and Zamboanga del Sur; however, there was a levelling off beyond medium-sized farms in Bulacan. In Cagayan and Masbate, productivity declined with size.

At the national level, about 60 per cent of the milkfish farmers interviewed produce less than 500 kg per hectare per year; 21 per cent produce between 500 to 1,000 kg per hectare per year while only 19 per cent produce more than 1,000 kg per hectare per year (table 14). As expected, Bulacan and lloilo provinces have the highest proportion of producers who produce 500 or more kg per hectare per year. However, even in these two provinces, almost one third of the producers still fall into the lowest category.

Almost half of the producers in Pangasinan have yields over 500 kg per hectare per year. It is also important to bear in mind that the distribution reported here is for the sample which, by design, was skewed in favour of intensive systems. For the country as a whole, an even higher proportion than shown here would have productivity less than 500 kg per hectare per year.

In the other four provinces surveyed, the picture is a very discouraging one. In fact, the average producer using inputs in these four provinces is operating at a loss (table 15). Masbate, Zamboanga del Sur, and Bohol have large proportions of milkfish farmers (exceeding 85 per cent) who are still producing less than 500 kg per hectare per year. In Cagayan and Pangasinan the figures are 63 per cent and 51 per cent, respectively. It is apparent, therefore, that a potential exists to tap this unused capacity to produce higher output.

8. Input use

Producer's decisions regarding selection and combination of inputs are influenced by: knowledge of what inputs to use, the expected contribution of inputs to total output and profits; availability of inputs; prices of inputs and output; and the liquidity position of the producer.

Although some milkfish producers recognize the important role of supplementary inputs such as fertilizers in the production of milkfish, the majority only apply minimal quantities. Input utilization also varies among provinces and among farms within the same province. Iloilo is one of the few provinces where all milkfish producers surveyed use inputs. This is in contrast to Cagayan where large numbers of producers who do not use any inputs, above and beyond the labour and fry or fingerlings needed, were, consequently, not included in the sample. In Pangasinan, milkfish producers claim that their ponds are still fertile and inputs are, therefore, not required. However, lumut or filamentous green algae are purchased from suppliers (fig. 14) to increase the available food supply in the ponds. The most commonly used inputs are chicken manure, all-ammonium sulphate (18-46-0), monoammonium sulphate (16-20-0), urea (45-0-0), rice bran, and pesticides such as Aquatin, Gusathion, and Brestan.

Input price variations are inevitable due to market differences of supply and demand from province to province (table 16). For example, while the national average price of organic fertilizers (primarily chicken manure) is 40.29 per kg, the average cost by province displays wide variation. In lloilo, where milkfish farmers are paying the highest price for organic fertilizer (40.57 per kg), they also complain of a shortage of chicken manure.

TABLE 15. Average Per-Hectare Costs and Returns of Milkfish Production in Seven Provinces, 1978

Note: Milkfish production costs comprise material inputs, labour, and miscellaneous operating costs. However, an imputed cost for land has not been included for owner operated farms.

TABLE 16. Input Price Variations by Province (P/kg)

a. Primarily chicken manure.
b. Primarily 18 46-0.
c. Primarily rice bran.

Price differences are smaller in the case of inorganic fertilizers, ranging from P1.48 to P1.71 per kg, with an average price of P1.66.

There are many different kinds of supplementary feeds used in milkfish production. These are rice bran, breadcrumbs, broken ice-cream cones, booster feeds, and hog mash. Because of this, an average price for supplementary feed was estimated based on their individual prices Milkfish farmers pay an average price ranging from P0.50 to P1.47 per kg. The high costs in Pangasinan could be attributed to the inclusion of lumut as a form of supplementary feed.

Aquatin, Endrin, Gusathion, and Brestan are commonly used pesticides most often applied to the pond bottom before stocking. In the case of Brestan, price variations among the seven provinces are minimal, the average price being about P120 per kg. However, Zamboanga del Sur is an exception where the price is P249 per kg. Tobacco dust, used in only two provinces, has an average price of P0.28 per kg (Bulacan) and P0.50 per kg (Zamboanga del Sur). Costs of liquid chemicals such as Gusathion, Aquatin, and Endrin vary from P31.40 (Pangasinan) to P66.00 per liter (lloilo). The national average price is P56.30 per litre. The Zamboanga del Sur, Bohol, Masbate, and Cagayan prices for liquid pesticides are close to the national average price, while the Bulacan price is higher.

Philippine milkfish producers cited several problems in connection with the use of inputs. Except in Cagayan, milkfish producers complained of high input costs, especially of fertilizers and pesticides. Unlike agricultural farmers, milkfish producers receive no preferential treatment to encourage the use of supplementary inputs, and government price subsidy for inputs was cited by producers as a possible solution to this problem.

Because of input-output price variations from province to province, producers will make differing decisions regarding added input use, because it will be profitable to use an input only if the value of its marginal product exceeds its cost. For example, if the hypothetical value of the marginal output from an added kilogram of chicken manure is P0. 30, it will be profitable for producers in Zamboanga del Sur to apply this added kilogram at a cost of P0. 10 per kg while in lloilo where the cost is P0.57 per kg it would not pay to do so. In the final subsection of this chapter, the value of the marginal product for the various inputs is determined, in order that they can be compared with input price, thus indicating the degree of economic efficiency in the transformation sub-system.

Theoretically, the capital and liquidity position of a producer can be classified as either unlimited or limited. With two different capital positions, there are two solutions to the problem of determining the most profitable combinations of inputs and level of output. The producer with unlimited capital would produce at the point where his marginal product is equal to the input-output price ratio, that is where marginal revenue equals marginal cost. However, the producer with limited capital maximizes his profits if he allocates inputs such that the return on the last peso spent on each input is equal. In the case of the Philippine milkfish industry, the latter condition is widespread.

It is for this reason that past and present government programmes for aquaculture development have emphasized credit. However, credit to purchase inputs has not been given emphasis because loans have generally been restricted to capital improvements only. Surprisingly, even though a large number of milkfish farmers are short on capital, the rate of participation in the government-sponsored credit programmes is poor. Two possible explanations are that either these farmers are not under economic pressure to obtain higher output, or the procedures for loan application inhibit participation.

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