Philippine Institute for Development Studies
Policy Notes January 2000
Hatchery-Bred Milkfish Fry: A Must for Fisheries Development! Danilo C. Israel*
ilkfish is the national fish of the Philippines not only because it is a favorite viand of the population. The milkfish industr y has also been contributing about 10 percent, on average, to total fisheries production for the past two decades (Israel 2000). The industr y likewise employs approximately 800,000 people when all its backward and forward industr y and activity linkages are accounted for. Although milkfish is important, however, its production has been declining in the past two decades (Figure 1). Output in the 1990s was significantly lower than in the previous decade and has stagnated in recent years. The poor per formance of the milkfish industr y has been due to a large extent to the limited supply of fr y. In the last ten years or so, the fr y supply from the wild has
been declining rapidly (Ahmed et al. 1999, Bagarinao 1999). In contrast, the demand for fr y has been growing due to culture intensification and the shift in production toward milkfish farming in reaction to the decline of the prawn industry.
Future fry requirements Results of recent computations show that if milkfish production is to keep pace with the average annual national population growth of about 2.5 percent, the countr y will have to produce about 356 million more fr y in 2005 and 617 million more in 2010 compared to the 1997 level (Table 1). These required volumes of fr y will rise dramatically if there would be a decline in the available wild fr y from the 1997 level or if other objectives beyond just meeting the needs of the growing population are targeted as well. Said objectives may include the (a) seeding of open water bodies, (b) lowering of the nutritional deficiency rates of the population, and (c) exportation. For instance, if the growth rate in milkfish production is aimed at 5 percent annually, the additional fr y requirement will go up to 1,443 million by 2010.
———————— * The author is Senior Research Fellow at the Institute.
PIDS Policy Notes are observations/analyses written by PIDS researchers on certain policy issues. The treatise is wholistic in approach and aims to provide useful inputs for decisionmaking. This Notes also appears as PIDS Discussion Paper No. 2000-05 entitled "The Milkfish Broodstock-Hatchery Research and Development Program and Industry: A Policy Study" by Dr. Israel. The views expressed are those of the author and do not necessarily reflect those of PIDS or any of the study's sponsors.
Figure 1. Annual Quantity of Milkfish Production by Subsector, Philippines, 1979-1997
Problems in R&D program and industry for hatchery-bred milkfish fry
200,000 Metric Tons
promote the competitiveness of local mikfish-based products in both domestic and international markets.
Source: Israel (2000)
Relevance of the hatchery-bred milkfish fry industry
Recognizing the importance of hatcher y-bred fr y, the national government, through the Southeast Asian A ll s e c t o r s Fisheries Development CenC o m m erc ial terâ€“Aquaculture Department M u n ic ipal Aquaculture (SEAFDEC-AQD), has, for years, been conducting a research and development (R&D) program aimed at developing its production technology. Largely as a result of this program, a fledgling hatcher y-bred fr y industr y currently exists. So far, however, its production is still too low and inconsistent to register a significant impact on total fr y production. 1996
The problem of limited supply of milkfish fr y can be addressed either through importation or the development of a homegrown industr y that will produce hatcher y-bred fr y in sufficient quantity and quality. The first option is considered undeTable 1. Estimated Annual Additional Requirements sirable since it can lead to the transport into of Milkfish Fry in the Philippines, 1998-2010 the countr y of certain milkfish diseases that Additional Requirements at Different Growth Rates are not locally endemic. Furthermore, it will (In million pieces) cost much-needed foreign exchange and forYear 2.5% 3.0% 3.5% 4.0% 4.5% 5.0% feit the country of the chance to exploit its 1998 40.73 48.88 48.88 65.17 73.32 81.46 natural comparative advantage in aquaculture. 1999 82.48 99.22 99.22 132.95 149.93 167.00 The second option or the development of an industr y that produces hatcher y-bred milkfish fr y, therefore, is the logical answer to address the problem of limited fr y supply over the long term. Besides avoiding the undesirable effects of importation, hatcher ybred fr y will help decrease the price of fr y and milkfish products over the long term. This effect is particularly important since it can
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
125.27 169.14 214.10 260.18 307.42 355.83 405.46 456.33 508.47 561.91 616.69
Source: Israel (2000)
151.08 204.49 259.50 316.16 374.52 434.64 496.55 560.33 626.01 693.67 763.36
151.08 204.49 259.50 316.16 374.52 434.64 496.55 560.33 626.01 693.67 763.36
203.43 276.74 352.98 432.27 514.73 600.49 689.68 782.44 878.91 979.23 1,083.57
229.99 313.66 401.09 492.46 587.93 687.71 791.97 900.93 1,014.78 1,133.76 1,258.10
256.81 351.11 450.13 554.10 663.27 777.89 898.25 1,024.63 1,157.32 1,296.65 1,442.94
What causes this situation? There are three major reasons that may be cited, namely: Technical problems. Various aspects of the broodstock and hatcher y components of the hatcher ybred fr y technology still need refinement and intensive work by researchers. Solving the problems is a prerequisite for the improvement of the production per formance of the industr y. Market problems. The market for hatcher y-bred fr y is still unstable due to the technical constraints as well as the weak marketing efforts of the government agencies concerned and the industr y as a whole to promote the product as an acceptable, if not better, alternative to wild fr y. Institutional problems. A number of institutional constraints affecting the adoption of the appropriate technology for the hatcher y-bred milkfish fr y exist, in particular the weak and disorganized efforts of the pertinent fisheries institutions in technology verification and dissemination.
The need for immediate action Since hatcher y-bred milkfish fry is important to milkfish production and milkfish itself is a nutritional and economic mainstay, the government must provide stronger support to its R&D program, in a manner similar to the support being given by the United States and Canadian governments to salmon R&D. In more specific terms, the following recommendations should merit due consideration: Prioritize response to technical problems. Efforts to refine the hatcher y-bred fr y technology must be afforded priority by the government to come up with technical solutions that will improve the production performance of the industry. Along this line, future funding of the hatcher y-bred fr y R&D program should be continued, if not in-
creased. For efficiency, support must be channeled mainly to the research agencyâ€”the SEAFDECâ€“AQDâ€”which has accumulated comparative advantage in the development of the technology. This institution must continue to take the lead in technology development and, together with the Philippine Council for Aquatic and Marine Research and Development (PCAMRD), and Bureau of Agricultural Research (BAR), coordinate activities to eliminate duplication of work and attain common goals at the least cost and shortest time. Assist in market development. In the area of marketing, the government will already have done much by simply providing continued support to technical research. This is because many of the marketing problems faced by the hatcher y-bred milkfish fr y industr y are actually related to its ability to provide fr y in sufficient quality and quantity. In addition, the Bureau of Fisheries and Aquatic Resources (BFAR), whose functions include extensive development support to the fisheries industr y in all aspects including marketing, can do more to help. Said agency should exert efforts to organize the small-scale operators so that they will have better pricing and marketing leverage against the large-scale operators. Further marketing and development assistance can also be extended by the national government to all industr y operators by way of revisiting and rethinking Section 99 of the Philippine Fisheries Code which bans the exportation of milkfish fr y. The original purpose of this provision is to control the outflow of local fr y from the countr y since the local fr y's low supply was thought to remain a big problem for a long time. With the expected expansion of the hatcher y-bred milkfish fr y industr y in the near future, this may no longer be valid. A reassessment leading to a possible amendment of said Section and the policy of banning the exportation of milkfish fr y is thus in order. Allowing fr y exportation will expand the market for local fr y, which is needed in times of overproduction, and provide the countr y with the benefits of economic liberalization. This will also give local fr y suppliers a certain amount of economic fairness
vis-à-vis fr y demanders since the countr y has been allowing fr y importation to occur for quite some time now. Streamline institutions and activities. The institutional problems faced by the hatcher y-bred milkfish fr y R&D program and industr y are not unique as they also hold true for fisheries R&D in the countr y (Israel 1999). At the risk of being redundant, streamlining the efforts, if not the agencies themselves, is important to make R&D and extension a more cohesive, efficient and less costly undertaking. Streamlining should also be the rule, instead of exception, in public governance as a whole. As an extension institution, BFAR should play a more active role in the dissemination of the hatcher y-bred milkfish fr y technology to the private sector. Since the time that the National Bangus Breeding Program (NBBP) ended, the activities of the bureau related to the technology use have been weak, if not nonexistent, partly because it had been transformed into a staff agency for some time. With its conversion back into a line agency, BFAR should again play the lead role in fisheries extension.
Conclusion In this age of globalization and economic liberalization, the future of the milkfish industr y appears rosier with the advent of a hatcher y-bred fr y industr y. It is now up to the national government and the private sector to sustain the early gains by working together and supporting the hatcher y-bred fr y industry and R&D program which made it possible. 4
References Ahmed, M., N. Lopez, G. Magnayon-Umali, R. A. Santos, J. Toledo and F. Torres, Jr. “Report on an investigation of the fry industry." Joint publication of the International Center for Living Aquatic Resources Management, Bureau of Fisheries and Aquatic Resources, Southeast Asian Fisheries Development Center–Aquaculture Department and the Philippine Council for Aquatic and Marine Research Development, 1999. Bagarinao, T. Ecology and Farming of Milkfish. Tigbauan, Iloilo: SEAFDEC Aquaculture Department, 1999. Israel, D. “The Milkfish Broodstock-Hatchery Research and Development Program and Technology: A Policy Study.” PIDS Discussion Paper Series No. 2000-05. Makati City: Philippine Institute for Development Studies, 2000.
It is encouraging to note that lately, BFAR and SEAFDEC-AQD have agreed to pool resources and work together to conduct a nationwide extension of aquaculture technologies developed by the latter, including the hatcher y-bred milkfish fr y technology (SEAFDEC-AQD 1999). This is one example of cooperation and streamlining that is much welcome as it can hasten technology adoption.
————————. “Research and Development in the Philippine Fisheries Sector.” PIDS Discussion Paper Series No. 99-17. Makati City: Philippine Institute for Development Studies, 1999.
Consider the social impact. The problem of social equity should also take centerstage in the development of the hatchery-bred milkfish fr y industr y not just because it is an avowed goal of the current national administration but also because “Development for whom?” is a question that ever yone must consider. The industr y should be examined in light of its economic and social impact on fr y gatherers and the communities to which they belong. It is only after incorporating these potential costs that the overall net effects of the industr y will be known.
For further information, please contact
Southeast Asian Fisheries Development Center–Aquaculture Department. “SEAFDEC-BFAR Forms Food Security Mission.” AquaDep’tNews XIV, 11 (1999).
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