An economic analysis of hard clam (Meretrix meretrix) farmer polyculture with milkfish (Chanos chanos), silver sea bream (Rhabdosargus sarba), and shrimps at different hard clam stocking densities: a case study of Yunlin County, Taiwan

Abstract

This study uses a translog cost function model based on two different hard clam stocking densities to estimate the cost and price elasticity of input factors to evaluate whether the hard clam polycultures in Yunlin County, Taiwan, have economies of scale and economies of scope and to assess the substitutability between inputs. The study found that farmers with hard clam stocking densities higher than 1,500,000 individuals/ha (high-density farmers) generated more profit than farmers with stocking densities below 1,500,000 individuals/ha (low-density farmers), because they experienced lower average costs and higher production outputs. Moreover, the own price elasticity of labor input (−1.162) was more responsive to price changes for high-density farmers than for low-density farmers. That is, wage increases have a significant effect on reducing labor demand for high-density farmers. For these farmers, the Allen partial cross-price elasticities of the variable inputs labor-seed and labor-feed were 1.973 and 2.326, respectively. These positive elasticities indicate that labor-seed and labor-feed are substitutes. That is, increases in seed and feed prices could be compensated for by increasing labor inputs for high-density farmers. This study established the existence of constant overall scale economies and economies of scope for high- and low-density farmers. In addition, the study suggests that hard clam farmers with fish and shrimp polycultures consider cost complementarities and product-specific economies of scope at various levels of production. Low-density farmers are also advised to increase the milkfish population in their polycultures, whereas high-density farmers might increase silver sea bream and shrimp densities.