Transport Modeling Analysis to Test the Efficiency of Fish Markets in Oman

Abstract

Oman’s fish exports have shown an increasing trend while supplies to the domestic market have declined, despite increased domestic demand caused by population growth and income. This study hypothesized that declining fish supplies to domestic markets were due to inefficiency of the transport function of the fish marketing system in Oman. The hypothesis was tested by comparing the observed prices of several fish species at several markets with optimal prices. The optimal prices were estimated by the dual of a fish transport cost- minimizing linear programming model. Primary data on market prices and transportation costs and quantities transported were gathered through a survey of a sample of fish transporters. The quantity demanded at market sites was estimated using secondary data. The analysis indicated that the differences between the observed prices and the estimated optimal prices were not significantly different showing that the transport function of fish markets in Oman is efficient. This implies that the increasing trend of fish exports vis-a-vis the decreasing trend of supplies to domestic markets is rational and will continue. This may not be considered to be equitable but it is efficient and may have long-term implications for national food security and have an adverse impact on the nutritional and health status of the rural poor population. Policy makers may have to recognize the trade off between the efficiency and equity implications of the fish markets in Oman and make policy decisions accordingly in order to ensure national food security.