Impact of different policy options on profits of private catfish farms in Chicot County, Arkansas

Abstract

The catfish industry is recognized as an important component of foodfish aquaculture in the U.S. Due to different economic factors, the live catfish price has fallen below the breakeven price. In this study, a policy analysis matrix is used to identify changes in private and social economic incentives of catfish farms under alternative policy options. Farm level data were used to estimate private profits and different world prices were used to estimate social benefits and costs of producing live catfish in Chicot County, Arkansas. The results indicate that catfish farms paid about $1.06/kg in implicit tax for live catfish sold in 2001. The most affected are catfish farms operating less than 40 ha. Any policy aimed at stabilizing catfish prices will be very beneficial, particularly, given limitations to access of capital by small‐scale farms resulting from lending limits on borrowing.