Graduation from Subsistence to Commercial Aquaculture: Evidence on Household Welfare

Abstract

This paper investigates the possibilities of subsistence homestead aquaculture producers to commercialise using a two-wave panel data of 518 households in Bangladesh. A binary endogenous switching regression model is applied to explore opportunities and constraints of commercialisation and a counterfactual analysis to estimate the effects of commercialisation on income and poverty. The study finds that while there is good potential for commercialisation, only a few households do that. Households who engage in commercial aquaculture achieve higher per capita income and are less likely to be poor. The study also finds that subsistence fish farmers who transform towards commercialised producers tend to receive support from non-government organisations, are members of fish farmers’ associations, and have better access to local fish markets. A major constraint to aquaculture transformation is the lack of government attention to the subsistence-oriented homestead fish producers, thus forgoing a huge potential for reducing poverty and increasing welfare. The paper suggests that fisheries extension services should develop and implement a specifically-targeted aquaculture commercialisation program in cooperation with the agricultural extension.