Subsidies, aquaculture technology adoption, and welfare impacts in Ghana and Kenya

Akuffo Amankwah, Purdue University

Abstract

This dissertation empirically examines subsidies, aquaculture technology adoption, and welfare implications of fish farming households in Ghana and Kenya. It is divided into three separate chapters, each addressing a specific empirical issue related to aquaculture in the countries. The second chapter of this dissertation applies the lognormal double hurdle model to a cross-section of fish farms to analyze commercial demand for improved feed, and whether the government feed subsidy program influences private demand for the feed. The results indicate that households’ decisions to participate in improved feed market are affected by the quantity of the subsidized feed received. Once the participation decision has been made, the paper finds evidence of crowding-in of the private improved feed sector; that is, the government’s allocations of subsidized feed appear to increase private sector demand. In addition, the price of improved feed influences demand negatively. Moreover, education, extension contacts, and ease of marketing matured fish increase household propensity to purchase improved feed commercially. The implications of these are that policies that help reduce the price of improved feed, such as reduction in tariffs on imported feeds and feed ingredients will foster demand for the feed, as will policies that facilitate marketing of fish at reasonable prices by households. Chapter three uses the same survey dataset as in chapter one, to examine the impact of improved feed technology on fish income and poverty, using the propensity score matching technique. Propensity score matching (PSM) analysis allowed for creating a counterfactual comparison group, given that households were not randomly assigned to improved feed adoption group, resulting in selection bias. The results indicate that improved feed technology adoption increases aquaculture income and reduces poverty among fish farming households. Specifically, the income effect of the technology is 23 – 37 percent, with resultant poverty reduction effect of 19 – 23 percentage point. The percentage and absolute impacts are higher among households operating small fish farms (average of a single pond). Chapter four combines the methodological approaches for chapter one (double hurdle model) and chapter two (propensity score matching) to examine the determinants of adoption and extent thereof, and welfare impacts of improved feed in Ghana using a cross-sectional data of fish farming households. The study focuses on the Ashanti, Brong Ahafo, and Western regions of Ghana. The data shows that the quantity of improved feed purchased and used on-farm is far below what is technically recommended for maximum yield. The results of the PSM analysis provide evidence that improved feed technology increases fish income, as well as reduce poverty among fish farming households in the three regions studied. Moreover, in order to foster adoption and intensity thereof in Ghana, the results indicate that improving education, extension services delivery, and area under fish farming are vital.

Degree

Ph.D.

Advisors

Preckel, Purdue University.

Subject Area

African Studies|Agricultural economics

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