Abstract
Sea cage farming of seabream and seabass is the most important form of aquaculture production in the Mediterranean Sea. Despite the continuous global growth in aquaculture production and demand, the economic performance of seabream and seabass companies has not followed the same trend. In recent years, companies have faced successive periods of market instability, with high volatility in supply and market prices that have strongly affected their operational margins. Despite the regional importance of this industry, only a handful of studies have examined the economic performance of these farms. In this paper, we investigate the technical efficiency and scale effects of Mediterranean aquaculture farms. Furthermore, environmental impact in terms of nutrient emissions from the farms is examined and discussed. Technical efficiency effects are analyzed using Data Envelopment Analysis (DEA), and the bootstrap procedure is used for bias correction. The results show that the mean technical efficiency could be improved by between 16% and 34%, and scale efficiency suggests that farms could improve their efficiency by operating at an optimal scale. Compared to measurements in previous studies, the environmental variables show that the emission of nutrients from the farms per kilo of fish produced has not changed over the past twenty years. Finally, policy implications suggest that more attention toward improving technical efficiency may help improve the robustness of the sector and that environmental regulation might be needed in order to improve the environmental performance of farms.
Highlights
Intensive production of fish in sea cages is a relatively new industry, which started in the 1970s with salmon production in Norway (Asche 2008)
The results show that the mean technical efficiency scores from the basic Data Envelopment Analysis (DEA) models are 0.83 and
The technical efficiency effects were analysed for both an input- and an output-oriented DEA model, and the bootstrap procedure was applied for bias correction
Summary
Intensive production of fish in sea cages is a relatively new industry, which started in the 1970s with salmon production in Norway (Asche 2008). The salmon industry faced some turbulent times during the 1990s (Asche and Bjørndal 2011) caused by falling prices due to the increased supply. The seabream and seabass industry faced several setbacks during the 2000s due to falling prices as a consequence of the rapid growth in supply (Llorente et al 2020). The seabass and seabream industry has not been able to expand market demand to the same extent as the salmon industry (Asche et al, 2011). This has led to periods of market instability, with high volatility in supply and market prices that has strongly affected seabream and seabass companies’ operational margins (Llorente et al 2020)
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