|Economics of the Philippine Milkfish Resource System (UNU, 1982, 66 pages)|
|III. The transformation sub-system: cultivation to market size in fishponds|
Having discussed the significant explanatory variables found in the model, we now turn to a discussion of the insignificant variables. An insignificant variable is one for which the coefficient is not significantly different from zero. Increases in these inputs will, therefore, have no significant impact on output. In some cases, however, these results may be due to difficulties in measuring accurately the inputs in question.
Take, for instance, the process of acclimatizing the seed stock (X4) which is found to be insignificant in explaining variations in milkfish output. Discussions with experienced farmers revealed that milkfish fry and fingerlings are very sensitive to changes in their environment. Small differences in temperature, pH, salinity, and other water conditions result in shock and lead to unnecessary stress to the young milkfish. From the above, we would expect that the number of hours of acclimatization would help to explain output variation. However, the insignificance of the coefficient implies that number of hours may not measure the required process of acclimatization adequately. Also, the purpose and process of acclimatization is not clearly understood by the farmers who practice it. If properly carried out, acclimatization can affect yields.
Another variable which is found to be insignificant is hired labour (X5 ) because it has been narrowly defined, and does not include all the labour employed on the farm. For example, it does not include the operator's labour, family labour, and caretaker's labour, because it was not possible to determine the number of hours of work actually performed on the farm by these three categories of labour. Respondents were only able to provide information on the available labour hours. Hired labour is, thus, not a satisfactory measure of the total labour input. Total labour may, in fact, have a significant effect on output if there were a way to measure it accurately.
It is not altogether surprising to find that years of milkfish culture experience (X7) is not significant in the model. Experience was chosen as a proxy variable for management. Although technical know-how is known to affect milkfish production, years of experience is apparently not an adequate measure of technical knowledge or management ability. To an extent this finding reveals that producers' experience is based primarily on knowledge of traditional methods of culture, and not on the more recent technology. Recent information on improved methods of production is, apparently, either not reaching the majority of milkfish producers, or not being adopted by them. Field observations show that information dissemination in the country could be improved to update producers' knowledge of improved techniques based on the increased use of supplementary inputs.
Lastly, the application of pesticides (X8) to protect the milkfish stocked from predators and pests competing for the same food has no significant effect on the final harvest. The incorrect and low levels of pesticide application have partly contributed to its insignificance. Predation on milkfish is reported as a common problem, yet necessary measures taken to rid the ponds of these predators are apparently not adequate.
In summary, of the 11 explanatory variables hypothesized to explain variation in milkfish output the following are significant: age of pond, milkfish-fry and fingerlings stocking rate, miscellaneous operating costs, organic and inorganic fertilizers, and farm size. Pesticides, milkfish culture experience, acclimatization, and hired labour, as we measured them, are not significant in explaining output.
All but three production coefficients (milkfish fry, farm size, and miscellaneous operating costs) have values less than 0.50 in every case. The estimated production coefficients in the two national production functions are consistent with respect to the magnitudes, signs, and significance levels. Profits of the average producer can be increased if fry stocking rate and use of organic and inorganic fertilizers are increased.