Abstract

Intense discussion over aquaculture’s contribution to rural development and poverty reduction has resulted from the fish farming industry’s explosive rise over the past three decades. The central issue in these discussions is whether and how aquaculture affects local wages and employment, yet there is little empirical support for this claim. In order to answer this query, we put forth a Local Economy-wide Impact Evaluation model that nests fish farm models inside a general equilibrium model of their local economies. A primary data set of 1102 families in the principal aquaculture zone of Myanmar, which accounts for 60% of the nation’s aquaculture farms, was used to calibrate the model. With the help of this model, we look at how aquaculture has affected the earnings and employment prospects of households involved in fish farming as well as households with crop farms and non-farm occupations in the cluster. When we simulate increases in pond/plot surface of one acre, we find that: the retail and labour markets; and (3) small commercial fish farms generate greater spillovers than large fish farms. These findings support the idea that small-scale commercial aquaculture, specifically fish farming, may have a big impact on rural development and poverty alleviation.