Bienestar personal y adaptación sociocultural

Backward linkages

A sector’s backward linkages represent its relationship with the rest of the economy through direct and indirect purchases from other sectors. The type and size of backward linkages depend on factors such as agricultural technology, size of land holding and type of commodity. The larger the share of inputs into a sector that are nontradable (i.e. those not imported or exported to or from the area and that do not have tradable substitutes available locally) the stronger its backward linkages and hence multiplier effect will be. As shown in Chapter 5, the main inputs into small-scale pond aquaculture (and aquaculture generally) are fingerlings and feed. A budget was estimated for fish farmers who have been trained and/or use BMPs (fish farming type A) based on the PBs presented in Chapter 5⁶⁸ and interviews with FC staff (see Appendix 9 for estimated budget for a 600m² pond). The estimated budget shows that fingerlings represent approximately 30 percent of total costs (and over 40% of variable costs). Small-scale fish farmers in Ashanti Region use fingerlings produced mainly by government or private hatcheries located outside Ashanti Region, and some from other fish farmers, and these are therefore defined as nationally nontradable inputs.

The estimated budget shows that feed, the other main input into aquaculture production, represents on average nearly 24 percent of fish farming type A total costs (and just over 30% of variable cost). Small-scale fish farmers use a wide variety of feeds. However over 90 percent of farmers surveyed use rice bran and/or maize bran, mixed with groundnut peel. These are locally produced and consumed and generally not traded outside the region therefore both are defined here as regionally and nationally nontradable. A much lower percentage of small-scale farmers practicing fish farming type A (27%) supplement feeding with commercially formulated imported feed⁶⁹

68 All four PBs estimated in Chapter 5 include use of fertiliser and thus represent budgets for fish farming type A.

69 As none of the small-scale fish farmers that contributed to the PBs used commercial formulated feed, it was not included in the estimated budget for fish farming type A in Appendix 9. Thus it is

175

which is overall a tradable input even though elements such as overhead, storage and distribution costs are nontradable. Other nontradable inputs into small-scale pond aquaculture are fertiliser, lime and transportation representing just over 10 percent of total costs for fish farming type A.

Forward linkages

A sector’s forward linkages represent its relationship with the rest of the economy through its direct and indirect sales to other sectors. Food processing and distribution of agricultural products seem to generate the largest forward linkages in rural economies (Haggblade et al., 1989). Small-scale pond aquaculture (fish farming type A) in Ashanti Region currently has weak forward linkages as over 90 percent of farmers practising fish farming type A sell fish directly to consumers, which represent their most important marketing channel. 50 percent of farmers sell to consumers at the farm gate and over 40 percent sell to consumers in the village. Overall 90 percent of fish sold to all customers is unprocessed showing that distribution and processing of farmed fish is not important. However nearly 70 percent of fish farmers also sell fish to traders (63% of which is sold at the farm gate) who go on to sell to retailers and consumers but they are not as important a marketing channel as selling directly to consumers, meaning forward linkages are weak. Nevertheless there is potential for forward linkages to be stronger if adoption of small-scale pond aquaculture increases. Growth in fish supply in rural communities would require an increase in processing, trading and distribution activities, some of which is likely to be carried out by poor women.

Consumption linkages

Consumption linkages arise when additional income is spent on nontradable goods and services and this stimulates further demand for local industry and services. Section 6.2.4 below on economic multiplier effects estimates the marginal budget share (MBS) of small-scale fish farmers for regionally and

unclear what percentage of costs commercial feed represents for the 27 percent of small-scale farmers practising fish farming type A that use it.

176

nationally nontradable goods in Ashanti Region. The results indicate that for every extra dollar of income earned by farmers from small-scale pond aquaculture, 44 percent will be spent on regionally nontradable goods and services and 62 percent will be spent on nationally nontradable goods and services, implying strong consumption linkages. Spending of labourers’

wages on nontradable goods also contributes to consumption linkages and the MBS for nontradable goods for pond farm labourers is likely to be higher than for pond farm owners. The small-scale fish farm budget in Appendix 9 shows that labour represents nearly 80 percent of value added. Thus, consumption linkages may be even stronger for pond aquaculture if labourers’ spending on nontradables is taken into consideration.

Investment linkages

Capital or investment linkages occur when increased income is saved and used to finance local investment, reducing vulnerability and increasing productivity of local activities and potential elasticity of supply responses crucial to consumption linkages. The effects of investment linkages are not included in conventional economic input-output models and data were not collected on reinvestment of aquaculture profits. However fish farmers have higher levels of household assets, nonfarm income and income from household enterprises than non-fish farming households suggesting they may be likely to invest in local businesses. Small-scale pond farms are also locally owned implying that profits are likely to stay in the local area.

However gross profit margins for small-scale pond aquaculture are estimated to be modest indicating it is unlikely most fish farmers will be able to save much to reinvest into local businesses.

Service, infrastructure and institutional linkages

Service and infrastructure linkages are generated when increasing trade flows lead to improvements in local services particularly communications (e.g. telecommunications and transport services), increased investment in infrastructure such as roads, and reduced unit costs for service provision due to increased demand. Institutional linkages arise when increased production

177

and market activity changes institutions, for example rights and terms of access to land and water, or the relationship between producers and buyers and access to markets and market exchange. The effects of service, infrastructure and institutional linkages are overlooked in conventional economic growth linkage studies. Small-scale pond aquaculture does not seem to have had any effects on service provision, infrastructure or local institutions in the study area. However these linkages are stronger for large-scale cage aquaculture explored below.

Cost of living linkages

Cost of living linkages can occur when increased fish supply due to aquaculture adoption leads to a reduction in fish prices and a rise in people’s real incomes which is then spent on local goods and services generating consumption linkages. As noted in Chapter 2, Sections 2.2 and 2.3.5, cost of living linkages are strongest for products with high average budget shares, and local production and consumption and where markets are not well integrated so that local supply and demand are major determinants of prices.

While fish markets in southern and central Ghana are generally well integrated with fish reaching many of the inland rural communities where small-scale pond farms are located, the majority of fish available in these communities is processed (smoked and dried) and comes from the coast or from inland fisheries. Supply of fresh fish is not regular and does not meet demand at prevailing prices. These communities benefit greatly from cheaper and increased supply of fresh fish when fish ponds are harvested. At present, due to the small number of pond farms in villages and the long periods between harvests, harvesting is infrequent and cost of living linkages are very weak. However, as households spend a sizeable proportion of their cash income on fish⁷⁰ (especially when compared to expenditure on other food groups) the potential for increased adoption of small-scale pond

70 According to the GLSS5, on average 9.5 percent of household expenditure in Ghana is spent on fish and seafood which is nearly equal to the expenditure on bread and cereals (9.8%) (GSS, 2007:124). In the rural forest zone, expenditure on fish and seafood represent on average 20.8 percent of total expenditure (compared to 16% nationally) and is greater than expenditure on bread and cereals (16.4%) (GSS, 2007:129). In the rural forest zone actual and imputed expenditure on food represents 41.2 and 14.3 percent of total household expenditure respectively (GSS, 2007:121).

178

aquaculture in rural communities to generate cost of living linkages is strong, and potentially higher than for SME and large-scale cage aquaculture where increased production may not lead to price reductions (discussed further below).

6.2.2 Linkages arising from SME cage aquaculture