Economics of the milkfish fry and fingerling industry of the Philippines

These alleged problems provide the rationale for various government policies affecting the fry and fingerling industry. This study indicates a higer level of industry performance than hitherto supposed. In 1974, an estimated 1.35 billion fry were caught, a number adequate to meet annual stocking requirements. Allegations of fry shortage were based on simultaneous underestimation of catch and overestimation of stocking requirements and were traced to temporary price increases resulting from expanded fishpen area, which subsequently declined. Fry storage and transport mortality rates of 8.7% and 6.6%, respectively, compared with a mortality rate of 54% during rearing, indicated that major technical inefficiencies arise in fishponds rather than in the distribution system. Of every 100 fry caught, 38 are harvested at marketable size. Monthly average fry prices among 17 major trading regions were significantly correlated, indicating a high level of information flow in the industry. An examination of the concession system which restricts first sale opportunities of gatherers indicated that concessionaires are unable to capture their full monopsony advantage due to the "competitive fringe" of smugglers. Rather than exploitation, the concession system is a form of indirect municipal tax on fry gatherers. Since the fry industry is a 57 million peso per year industry upon which approximately 170,000 people directly and indirectly depend, it is suggested that the location of future milkfish hatcheries and timing of production be planned such that they complement rather than displace the natural fry fishery and distribution system. (Author abstract, modified)