The Influence of Changes in the Market Environment on Economic Production Characteristics of Pangasius Farming in the Mekong Delta (Vietnam)

Abstract

The Mekong Delta in Vietnam has become an important production area for pangasius. The importance of the sector in providing an income to many households means that it is relevant to study its economic production characteristics. In this article we use a stochastic cost frontier model to assess the adaptability of the sector. We are particularly interested in the effect of the changing market environment and the exponential growth of the sector on the evolution of production characteristics. We compare data from 2002 with 2006 data. The results show that pangasius farming became more efficient by 2006, with higher returns to scale. We discuss the possible policy implications of our findings.

Impact of Climate Change on the Technical Efficiency of Striped Catfish, Pangasianodon hypophthalmus, Farming in the Mekong Delta, Vietnam

“…Under the assumption of VRS the TE score of the pangasius farms was 0.84. This score is identical to the TE under VRS of the Vietnamese pangasius sector found for 2006 (0.85) by Binh et al (2010), but higher than the one for 2002 (0.69) by those authors, as well as the 0.75 found by Pham et al (forthcoming). The latter authors considered the capital cost of short-term loans and investment; our database did not include information to do this.…”

“…However, the SE of farms downstream is lowest, which may be due to the fact that some of these farms stock only once per year. In agreement with Binh et al (2010), these arguments imply that measures to increase TE of pangasius farms include the reduction of input cost as well as the increase of the scale of operation of smaller farms. The latter is in agreement with Kumar and Engle (2017), stating that the key to profitability appears to be related more to the proportionality of input and that investments in technology, such as aerators in channel catfish culture, need to go along with increased densities.…”

“…Using the same method, Dey et al () examined the TE and the effect elements of tilapia growout operations in ponds in the Philippines, and Ogundari and Akinbogun () assessed the factors affecting the TE of 64 tilapia, carp, and catfish farms in Nigeria. Kaliba and Engle () estimated technical and allocative efficiency of catfish farms in Arkansas, USA, using data envelopment analysis (DEA), and identified factors determining inefficiency using a Tobit regression approach, and Binh et al () used the same method to assess the historical improvement of economic productivity in pangasius culture. In the before‐mentioned studies, the authors focused on the explanatory variables based on socioeconomic factors only because such variables probably directly influence production efficiency (Dey et al ).…”