Effect of Culture Period and Stocking Density on Input Demand and Scale Economies of Milkfish (Chanos chanos) Polycultures with White Shrimp (Penaeus indicus)

Abstract

Milkfish, Chanos chanos, is one of the major inland cultured fish species in Taiwan. Variations in land resources and climate have led to the application of two distinct culture practices of milkfish polycultures with white shrimp, Penaeus indicus. This study applies a translog cost function model to analyze the production scale economy and input demand price elasticity of four milkfish polyculture systems with two different culture periods (OWC and NOWC) and two different white shrimp–milkfish fry stocking ratios (low SMR: 10–55 fry/ha; high SMR: 56–100 fry/ha). The findings show that the four milkfish polyculture systems require different operational adjustments to increase production while reducing the average culture cost. More specifically, overwinter cultures (OWC) have economies of scale. Farmers may reduce the average cost by expanding the production scale. Non-overwinter polycultures (NOWC) with high SMR are at the stage of decreasing return to scale, meaning that gains in output of milkfish cannot reduce the average cost. In terms of input factor use, farmers of OWC systems with high SMR are sensitive to fluctuations in the fry price since fry constitutes the input factor exhibiting the highest own-price elasticity. Moreover, fry and feed of OWC households with high SMR have high levels of substitutability, whereas fry and other input exhibit substitutability in OWC systems with low SMR. In NOWC farming households with high SMR, fry and capital have substitutability. It is thus recommended to modify the input factor use according to the culture mode and the white shrimp–milkfish stocking density ratio. Moreover, the study found that NOWCs have considerably higher SMR than OWCs, which may lead to a deterioration of the water quality in NOWC fishponds and lower survival rates. It is thus recommended to reduce the SMR to 31:1 to achieve economies of scale in production and increase the survival rate of milkfish and white shrimp.