Strategy for Sustainable Aquaculture Development for Poverty Reduction Project

547 Pages·2008·13.09 MB·English

Technical Assistance Consultant’s Report

Project Number: TA 4708
October 2007

Philippines: Strategy for Sustainable
Aquaculture Development for
Poverty Reduction Project

Prepared by

WorldFish Center

In association with Pacific Rim Innovation and Management Exponents, Inc. Philippines

This consultant’s report does not necessarily reflect the views of ADB or the Government concerned, and
ADB and the Government cannot be held liable for its contents. (For project preparatory technical
assistance: All the views expressed herein may not be incorporated into the proposed project’s design.

Asian Development Bank
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IN ASSOCIATION WITH
PACIFIC RIM INNOVATION AND
MANAGEMENT EXPONENTS, INC.,
PHILIPPINES
STRATEGY FOR SUSTAINABLE
AQUACULTURE DEVELOPMENT FOR
POVERTY REDUCTION PROJECT,
PHILIPPINES (ADTA 4708-PHI)

FINAL REPORT
October 2007

IN ASSOCIATION WITH
PACIFIC RIM INNOVATION AND
MANAGEMENT EXPONENTS, INC
PHILIPPINES
EXECUTIVE
SUMMARY
EXECUTIVE SUMMARY Page xiv

EXECUTIVE SUMMARY

A. Introduction

1. In 2006, the Asian Development Bank (ADB) approved an advisory and operational technical
assistance (TA) grant to the Government of the Philippines (GOP), through the Philippine Department of
Agriculture – Bureau of Fisheries and Aquatic Resources (DA-BFAR), to help formulate and
disseminate a medium- to long-term strategy for Philippine aquaculture. The resulting strategy was to
include an integrated action plan and investment program that would reduce poverty and enhance the
sustainability of Philippine aquaculture.

2. The TA project, entitled Strategy for Sustainable Aquaculture for Poverty Reduction, Philippines
(ADTA 4708-PHI), was implemented by a team of consultants fielded by the WorldFish Center,
Malaysia in association with Pacific Rim Innovation and Management Exponents Inc. (PRIMEX),
Philippines. The Project commenced in June 2006 and was implemented in two phases: a situation
analysis from July - September 2006, and strategy and action plan formulation from November 2006 -
February 2007, and preparation of the TA draft final and final reports from April – September 2007.

3. This Final Report describes the status of Philippine aquaculture, the challenges to be faced in
maximizing its contributions to poverty reduction, and the Strategy that was devised for meeting those
challenges, as well as recommended actions and investments.

4. The guiding principles for preparation of the Strategy were: (i) care for the natural environment
surrounding and supporting Philippine aquaculture; (ii) reduction of rural and urban poverty, through
increased participation by the poor in aquaculture production, marketing, and commodity chains; and
(iii) strengthening of food security for the poor through increased availability of affordable fish. The
Strategy was developed by the Project Team using a participatory approach, with a wide range of
stakeholders in Philippine aquaculture, to identify problems, set objectives, and prioritize among options
for action, following these principles.

5. The Strategy envisages a future for Philippine aquaculture that is pro-poor, globally competitive,
sustainable, productive, profitable, and equitable. Its key objectives for Philippine aquaculture are: (i)
improved overall productivity, sustainability, and efficiency; (ii) improved access to markets; (iii)
appropriate policy, legal, and institutional support for aquaculture development; (iv) increased
investment and financing; and (v) empowering the poor to participate in, and benefit from, aquaculture
development.

6. The Strategy is summarized here following the sequence that was followed during its
development. The development context and the challenges faced by Philippine aquaculture are
described first, followed by the Strategy’s proposed responses, prioritized actions, and conclusions.

B. Development Context

7. The overall development context for Philippine aquaculture is overpopulation, environmental
degradation, and institutional failures. All of these increase poverty and are, in turn, increased by
poverty. In particular, the natural environment of the Philippines has been severely damaged, and its
condition continues to worsen rapidly, principally as a result of unsustainable population growth and
unsustainable practices. In broad terms, about 75% of Philippine coral reefs, lakes, mangroves, primary
forests, and rivers have been destroyed or damaged. The healthy environment, which the Philippine
Constitution guarantees for its citizens, is no longer there for many, and per capita available natural
resources and ecosystem goods and services are disappearing daily at an alarming rate. In this
alarming scenario, the contributions to poverty alleviation from all sectors that use natural resources are
bound to be constrained.

STRATEGY FOR SUSTAINABLE AQUACULTURE DEVELOPMENT
FOR POVERTY REDUCTION PROJECT, PHILIPPINES
(ADTA 4708-PHI)
EXECUTIVE SUMMARY Page xv

8. Turning these situations around will require immense changes in public and political attitudes
and institutions. It will also require rapid, pro-poor application of all that science, technology, innovative
thinking, and entrepreneurship can offer. The Philippines has tremendous strengths here, but some of
these are eroding. Philippine education systems are under increasing stress through having to cope
with increasing student numbers on static or reduced budgets and because some of the best
professionals are joining an exodus to other countries.

9. High population growth and declining natural resources make poverty a major issue for the
Philippine government. Unemployment and underemployment are high at 8% and 23.5%, respectively,
in July 2006. Some 11% of Filipinos live on less than US$1 per day, and 40% on less than US$2 per
day. The incidence of poverty in rural areas is 54%, more than double that in urban areas (25%). In
2003, the regions with the highest poverty incidence rates were the CARAGA region of Northern
Mindanao (54%); Autonomous Region of Muslim Mindanao (ARMM) (52.8%); Zamboanga Peninsula,
Region IX (49.2%); Bicol, Region V (48.5%); and Region IVB in Luzon (48.1%).

10. Pervasive poverty threatens the food security and health of millions. Fish have always been vital
sources of animal protein, healthy lipids, and micronutrients for Filipinos, but declining capture fisheries
and higher fish prices have reduced the availability and affordability of fish for consumption by the poor.
Some poor fishers, who used to catch about 20 kg of fish per day, now catch only about 2 kg.
Aquaculture is now the main hope for contributing more fish for feeding the Philippine urban and rural
poor. For example, farmed tilapia is now cheaper than chicken and is replacing formerly cheap marine
fish, such as the roundscad or galunggong (Decapterus spp.), in the diets of poor people. Average
annual per capita consumption of tilapia in the Philippines increased from 0.66 kg (1979-1988) to 1.61
kg (1989-1997).

11. Aquaculture has already contributed much to Philippine fish supply and to the economy in
general. However, pressures to maximize use of resources as rapidly as possible, weak institutional
arrangements, and prevailing power structures have led to some unsustainable aquaculture
developments resembling gold rushes. These can have severe and lasting adverse impacts on the
environment and on the poor. Philippine aquaculture has yet to make adequate moves towards
responsible aquaculture practices, as guided by the Code of Conduct of Responsible Fisheries (CCRF)
of the Food and Agriculture Organization of the United Nations (UN-FAO), and needs to define and to
implement Best Aquaculture Practices (BAPs). The intent of existing aquaculture legislation in the
Philippines is good, but many regulations are not known to farmers or, where known, are widely
perceived as top-down, restrictive, and irrelevant to their circumstances and are often ignored with
impunity.

12. In this context, the main questions for Philippine aquaculture are: (i) which of its operations are
pro-poor and sustainable and (ii) what is their scope for growth. Aquaculture is as diverse as agriculture
and involves the farming of many aquatic species by many different methods in inland and coastal
waters. The Philippines reports aquaculture statistics annually for about 30 farmed aquatic species or
commodities. Among these, carrageenophyte seaweeds and tilapia provide the widest pro-poor
benefits, with many other aquaculture activities contributing to the livelihoods and nutrition of the poor at
regional and local levels. However, pursuit of diversity in aquaculture can sometimes divert scarce
research-development-extension (RDE) resources away from well-proven commodities and production
systems. In the Philippines, both government and private sector actors have tended to promote,
somewhat uncritically, a wide diversity of new candidate species for aquaculture, including unproven
alien species.

13. Aquaculture is a much younger industry than agriculture, capture fisheries, and forestry, and
often competes with these sectors for shares of land, water, human resources, and investments.
Intersectoral policymaking and institutions, geared to integrated watershed and coastal zone
management, are not yet well-developed in the Philippines. Aquaculture itself is a new frontier at which

STRATEGY FOR SUSTAINABLE AQUACULTURE DEVELOPMENT
FOR POVERTY REDUCTION PROJECT, PHILIPPINES
(ADTA 4708-PHI)
EXECUTIVE SUMMARY Page xvi

new products and farming methods are constantly being tried, and the development of effective
institutions to foster responsible aquaculture is lagging behind aquaculture development. The high
present and higher potential values of Philippine aquaculture to the national economy and adequate
support for its RDE continuum are not well-recognized, and investment in Philippine aquaculture RDE is
falling far short of what is merited. The National Extension System for Agriculture and Fisheries,
stipulated by the Agriculture and Fisheries Modernization Act (AFMA) of 1997 (Republic Act [RA 8435])
is not yet a reality. It is the responsibility of local government units (LGUs) to deliver direct extension
services to farmers, but they are under-resourced for this and have not yet performed adequately.

C. Challenges

1. Low Production and Poor Sustainability

14. The ecosystems and other resource systems that support Philippine aquaculture must be well-
managed to ensure their productivity and sustainability, not only for aquaculture but also for the other
sectors that use them. This calls for intersectoral, integrated coastal zone and watershed management
with the establishment of supportive institutions and information systems. The productivity and
profitability of many Philippine aquaculture operations are low. For example, the brackishwater ponds
that comprise about 90% of the Philippines’ total aquaculture production area contribute less than 50%
of its farmed fish production. In 2004, the average brackishwater fishpond yield was only 1.5 t/ha,
ranging from 0.39 t/ha in Region V to 3.68 t/ha in Region X.

15. Inadequate supply of high-quality seed is a major constraint to aquaculture productivity and
sustainability. Seed of known breeding history is increasingly sought because, with appropriate
husbandry, its performance can be well-predicted. Determination of seed quality is well-developed for
some farmed aquatic species (for example, penaeid shrimp), but is generally lacking for most others.
Standardized and stable strain nomenclature, and certification of the provenance of aquaculture seed,
are not yet in place. Access for farmers, especially small-scale operators, to genetically improved
strains is often lacking because of technical and organizational constraints. There has been insufficient
investment in the development of hatcheries and nurseries that are well-located to serve major and
potential growout areas.

16. The limited availability and high costs of key aquaculture inputs (particularly feeds and fertilizers
for ponds and feeds for pens and cages) are major causes of low productivity, especially for poor
farmers. In intensive aquaculture, feeds usually account for about 65% of total variable production
costs. Heavy dependence on commercial feeds in pond, pen, and cage culture discourages small-scale
farmers and has been responsible for farm wastes that cause environmental problems.

17. Introductions of alien aquatic organisms have led to the spread of diseases among farmed
shrimp and freshwater fish. Aquatic biosecurity measures to prevent this are currently inadequate. The
development and expansion of aquaculture in the Philippines has involved the introduction of over 40
alien aquatic species, some of which can pose threats to aquatic biodiversity, ecosystem health, and
aquaculture itself.

18. Climate change is already affecting Philippine aquaculture. For example, the periods during
which typhoons occur, and their geographical range, appear to be widening. Increased temperatures,
sea level rise, changing rainfall patterns, and increased incidence of storms are expected, together with
greater unpredictability of local weather. The impacts of climate change on aquaculture could be
positive and negative, e.g., increased productivity of some coastal waters, but with increased frequency
of harmful algal blooms (red tides). Inland aquaculture may be less affected, although droughts and
flooding are likely to increase in some areas.

19. The Philippine private sector is not yet adequately involved in advancing aquaculture; for
example, in genetic improvement, aquaculture biotechnology, and the development of cost-effective

STRATEGY FOR SUSTAINABLE AQUACULTURE DEVELOPMENT
FOR POVERTY REDUCTION PROJECT, PHILIPPINES
(ADTA 4708-PHI)