Abstract
The productivity and efficiency Of aquaculture farms depend not only on technology
development and adoption but also on market condiüons, credit access, geophysical
environment, land ownership pattern, and the social and cultural conditions under which
the farms are Situated and managed. Thus, the effect of credit constraint, production
environment characteristics and land tenure system on productivity and efficiency need to
be considered to promote the commercialization Of aquaculture. Therefore, this study is
going to answer the question that how credit constraints, production environmental
characteristics and land tenure systems influenæ aquaculture productivity and efficiency.
An Endogenous Switching Regression (ESR) is used to estimate the effects of credit
constraints on productivity. Besides, Data Envelopment Analysis (DEA) and Fisher quantity
index is employed to analyze the efficiency and total factor productivity (TFP) respectively.
Rank-Sum test is used to see the TFP and efficiency differences depending on production
environment characteristics. In addition, Propensity Score matching (PSM) is used to
estimate productivity variation, and the frontier production function (SFPF) is
employed to analyze efficiency variation depending on aquaculture farms' land ownership.
The sample size covers 645 aquaculture farmers from seven districts in Bangladesh that were
selected using a stratified random sampling technique. The results show that productivity is
significantly higher for farmers who are not exposed to credit constraints. This result reveals
significant production-enhancing effects when using modern inputs for both constrained
and unconstrained farmers. However, the effects are larger for the credit-unconstrained
farmers because they have the opportunity to buy higher quality inputs and use them in a
better input mix. The results also show that farmers cnuld significantly reduce input while
maintaining the same level of output. Furthermore, they demonstrate that the TFP and TE Of
a farm arc significantly affected by environmental characteristics. The results reveal that the
productivity and efficiency of cash tenant farms are significantly higher than those of self-
owned farms, which may be due to higher partial productivity and more access to the credit
of larger cash tenant farms. The net profit of cash tenant farms is significantly lower
of land rental costs. Furthermore, the efficiency of self-owned farms decreases with farm
size, while the opposite is true for cash tenant farms. For developing countries,
commercialization in aquaculture sector would increase the demand for policy actions to
make the necessary credits available to small-scale aquaculture farmers. Dissemination of
the results through training programs and extension services provided by public or private
stakeholders could help extensive pond farmers in developing countries. It is recommended
that young and educated people develop entrepreneurship in aquaculture with cash tenancy
for further increases in productivity, efficiency and profitability.