Using Welfare Economics to Qssess the Farming Scale for Milkfish Chanos chanos Aquaculture in Taiwan

This study conducted a series of simulations for reallocating the farming area of milkfish aquaculture based on a set of optimal prices according to the market concern. A supply and demand model was constructed using the multiple regression analysis, based on the data from 2004 to 2008 on the Annual Report of Fisheries Agency. Based on the producers' and consumers' surplus and social benefit, the optimal price was estimated to be 56 NTD/kg for an annual output of 42,398 MT. To reach the optimal price, the total milkfish farming area in Taiwan should be reduced for 20~34%, and 2,000 to 3,000 ha should be released for other types of farming. The reallocation plan was further evaluated for site selection. The evaluation on local temperature and productivity showed that the current farming area in Tainan is the optimal. This released farming area may improve resource utilization, thus increasing profitability and efficiency of aquaculture.