Economic performance differentials of coastal and noncoastal pond aquaculture farms in Bangladesh

Abstract

Due to the advantageous tidal movements and water exchange in coastal ponds, pangasius and tilapia farmers in Bangladesh benefit from higher water quality and nutrient levels, leading to higher quality fish at lower feed and water exchange costs. Therefore, the economic performance of coastal farms may be higher than for noncoastal farms. This study investigates the differences in technical efficiency and other economic performance indicators between coastal and noncoastal pond aquaculture farms. Data from 121 coastal and 479 noncoastal farms were analyzed using meta-frontier data envelopment analysis (DEA) and propensity score matching (PSM). Results show coastal farms are more efficient than noncoastal ones due to their advantageous locations. Locating new aquaculture farms to coastal regions could increase average output with the same inputs, follow industry best practices, save costs, and achieve higher returns on investment, reaching break-even at lower prices and quantities than noncoastal farms. Prioritize the development of aquaculture in coastal regions by providing incentives and infrastructure supports, as these areas offer competitive advantage over noncoastal regions.