Price%20Interaction%20between%20Aquaculture%20and%20Fishery

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Price Interaction betweenAquaculture and Fishery

• Roberta Brigante, IREPA and Audun Lem, FAO
• XIII EAFE CONFERENCE
• SALERNO 18-20 APRIL 2001

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PRICE INTERACTION BETWEEN AQUACULTURE AND CAPTURE
FISHERIES

• An econometric analysis of seabream and seabass
  in the Italian market
• 1991-1998

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RATIONALE FOR STUDY

• aquaculture accused of unfair price competition
• lack of data and studies
• Italian market in great turmoil
• increasing imports
• declining own catch
• Italian and Mediterranean aquaculture production
  increasing
• Italy main market for seabass/seabream from
  Greece, Turkey, Spain etc.

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DIVISION OF WORK

• FAO GLOBEFISH data, overall co-ordination
• IREPA data, analysis and scientific supervision

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PAPER OUTLINE

• 1. State of fishing and aquaculture
• 2. Methodology
• 3. Presentation of data used for analysis
• 4. Results of econometric analysis
• 5. Conclusions

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THE STATE OF WORLD FISHERIES AND AQUACULTURE
(SOFIA)

• Growing aquaculture sector
• unsustainability
• overexploitation
• FAO Code of Conduct for responsible fisheries

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METHODOLOGY

• Econometric models
• Identify appropriate model ( LSE analysis) from
  general to particular
• first phase general model with lags in
  endogenous and exogenous variability
• second phase test correct specification of
  general model, significance and stability of
  parameters deletion of non-significant
  parameters, estimation of resultant model
• nine restrictions and nine models

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ERROR CORRECTION MODEL (ECM) Engle and Granger

• If variables are co-integrated, estimate an
  ECM model
• If no co-integration, there is no long run
  equilibrium curve. In this case, the model that
  you can estimate is a first differences model.

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THE DATA

• quarterly seabass and seabream prices,
• capture and aquaculture
• source IREPA, FAO, Italy 1991-1998
• capture prices fairly stable with in-year
  vacillation
• farmed prices long-term decline
• capture quantitiesfairly stable
• farmed quantities significant increase

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THE ECONOMETRIC MODEL

• logarithmic specification of price time series LC
  and LA
• Dependent variable LC
• Independent var. LC, four times lagged
• variable LA
• variable LA, lagged
• 3 dummies seasonal
• 2 dummies exceptional values
• deterministic trend T

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RESULTS

• Seabass
• Seabream

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SEABASS

• Some co-integration between LC and LA, but no
  satisfactory results
• Granger causality test confirms result
• Farmed seabass no substitute for captured seabass
  (or vv)

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SEABREAM

• Models give satisfactory results
• LC and LA stationary
• no linkage between prices
• Granger causality test confirms result
• Farmed seabream no substitute for captured
  seabream (or vv)

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CONCLUSIONS

• captured and farmed seabass and seabream in
  Italy not subsitutes
• no link between prices
• long-term change in farmed prices no impact on
  long-term capture prices
• Granger causality test confirms results

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IMPLICATIONS

• two distinct markets
• each market should focus on its specific
  strengths
• falling farmed prices can be countered only by
  emphasis on quality, products diversification,
  improved logistics

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THANK YOU !