Price Premium and Resource Rents from Nile Tilapia Oreochromis niloticus (Linnaeus, 1758) Farming in Lake Sebu, Philippines

Abstract

With deep lakes and cool weather, high-quality tilapia Oreochromis niloticus (Linnaeus, 1758) is produced in the Municipality of Lake Sebu in the southern Philippines, fetching a price premium that results in Ricardian resource rent for fish cage operators. This extra rent has induced unsustainable aquaculture practices such as overcrowding fish cages, overstocking and overfeeding, which in turn, have resulted in water pollution and fish kills that partially wipe out the rent. This paper aims to estimate sustainable tilapia production and potential resource rent from tilapia farming in Lake Sebu using primary data gathered from key informant interviews, focus group discussions and a survey of tilapia cage owners. Results indicate that potential annual resource rent ranges from PHP49–61 million (USD0.95–1.18 million). Expressed on a per square meter of fish cage area, rent is calculated to be PHP12.22–15.21 or USD0.24–0.29, 8–10 times more than the annual fish cage permit fee of PHP1.5 (USD0.03). This Ricardian rent may be collected to fund the necessary lake water quality rehabilitation programs and aquaculture monitoring and regulation enforcement activities to prevent rent-dissipating fish kills and to ensure the preservation of the natural fisheries capital. Rent collection may be in the form of an additional permit fee that follows a progressive rate structure to address poverty and equity issues. The study illustrates the multi-faceted role of resource rent in fisheries exploitation and management, and adds to the still scarce literature on resource rent estimation in fisheries.