The determinants of fishing households’ income in the coastal plain areas of Quang Nam province

Social Sciences Information Review, Vol.12, No.4, December, 201812 The Determinants of Fishing Households’ Income in the Coastal Plain Areas of Quang Nam Province Hoang Hong Hiep PhD., Institute of Social Sciences of the Central Region, Vietnam Academy of Social Sciences Email: hoanghonghiep@gmail.com Chau Ngoc Hoe MA., Institute of Social Sciences of the Central Region, Vietnam Academy of Social Sciences Received 26 September 2018; published 25 November 2018 Abstract: This paper uses econometric models to estimate factors determining the fi shing household’s income in coastal plain areas of Quang Nam province. The estimation results indicate that the residential characteristics, characteristics of fi sheries, characteristics of household’s socioeconomic and demographics are the main factors having signifi cant impacts on fi shing household’s income. In contrast, fi sheries extension has no signifi cant impact on the diff erence of income between fi shing households. Based on the empirical results, some policy recommendations for improving the income of fi shing households in coastal plain areas of Quang Nam province are proposed. Keywords: Econometrics, Income, Fishermen, Factors, Coastal Region, Fishing, Quang Nam 1. Introduction Quang Nam, a coastal province in the key economic region of Central Vietnam, has many potentials and advantages in the development of marine economy. The provincial coastline stretches over 125 km, next to an exclusive economic zone of more than 40,000 km2 where large fi shing grounds with abundant marine resources, diverse in species and of high economic value are located. Despite the potentials for fi shery and aquaculture development, Quang Nam still has many especially diffi culty-stricken communes in coastal plain areas and islands. In particular, the current level of income of fi shing households in these areas is still low and there is considerable income variation in the community of local fi shermen. The paper investigates the factors determining the income of fi shing households in the coastal plain areas of Quang Nam province based on the primary data collected under the provincial-level The Determinants of Fishing Households’ Income 13 scientifi c research project of Quang Nam province “Factors aff ecting income of and income-raising measures for fi shing households in coastal plain areas of Quang Nam province”, led by Hoang Hong Hiep, 2017. The survey was conducted with 588 fi shing households in 12 communes/ wards in coastal plain areas in 6 districts of Quang Nam including Dien Duong commune (Dien Ban district); Cua Dai ward, Cam An ward (Hoi An city), Duy Hai commune (Duy Xuyen district); Binh Duong, Binh Minh, Binh Nam communes (Thang Binh district); Tam Thanh commune (Tam Ky city); Tam Hoa, Tam Tien, Tam Hai communes (Nui Thanh district). In particular, the sampling units in Thang Binh and Nui Thanh districts account for over 60% of the sample size. In general, the sample is quite large and representative. 2. Estimation Model Based on the analytical framework of Olale and Henson (2012, 2013), Garoma et al. (2013), Al Jabri et al. (2013), Hoang Hong Hiep (2016), we propose the model of factors determining the income of fi shing households in coastal plain areas of Quang Nam province as follows: Y i = α 0 + β 1 Regions i + β 2 Characteristics of fi sheries i + β 3 Socioeconomic and Demographics it + β 3 Fisheries Extension + ε i (1) In which: εi= model residuals; i = fi shing household i; i = 1,2,..., 588. Dependent variable (Y) indicates the total income of a fi shing household, measured by two scales: (i) the total income of a fi shing household in one year; (ii) Per capita income of a fi shing household in one year. Independent variables: Regions: These are dummy variables that refl ect the characteristics of fi shing households in diff erent districts. As the sample covers 6 districts of Quang Nam province, we use up to 5 dummy variables in the model to control for income diff erentials among fi shing households due to the characteristics of the residence areas. Characteristics of fi sheries: these variables refl ect the specifi c characteristics of fi shery activities of fi shermen that directly aff ect the income of fi shing households. The main fi shery characteristics are: capacity of fi shing vessels, fi shery technology and equipment, fi shing grounds, education level and experience of captains, consumption markets, diversifi cation of income. Socio-economic and Demographics: these variables refl ect the demographic and socio-economic characteristics of fi shing households. These attributes include: number of household members, number of dependent members, age of the fi shermen, education level of fi shermen, number of fi shery workers in the household, experience of fi shermen and captains, love for profession, the ownership of fi shing vessels. Fisheries Extension: these refl ect the mechanisms and policies of the State to support fi shermen in fi sheries development and income generation, measured by the variables such as: role of fi sheries extension work, fuel support, participation in cooperative groups or local fi sheries unions. Social Sciences Information Review, Vol.12, No.4, December, 201814 Table 1: Measurement and description of variables Variables Description Variable attribute Measurement Expected sign Independent variables Log (total income of fi shing households) LnTongTN million dong/year Log (per capita income of fi shing households) LnTNBQ_Nguoi million dong/year “Regions” variables Dien Ban Dienban 1: Dien Ban; 0: otherwise (+/-) Hoi An Hoian 1: Hoi An; 0: otherwise (+/-) Duy Xuyen Duyxuyen 1: Duy Xuyen; 0: otherwise (+/-) Thang Binh Thangbinh 1: Thang Binh; 0: otherwise (+/-) Tam Ky Tamky 1: Tam Ky; 0: otherwise (+/-) Nui Thanh Nuithanh 1: Nui Thanh; 0: otherwise (+/-) “Characteristics of fi sheries” variables Log (capacity of vessels) LnCongsuat CV (+/-) Level of catching and preserving technology Congnghe Likert scale 5 levels with: (1) very outdated and level (5) modern (+) Fishfi nder Tamngu 1: in use; 0: not in use (+/-) Fishing ground 1 Venbo 1: inshore fi shing; 0: otherwise (+/-) Fishing ground 2 Vunglong 1: nearshore fi shing; 0: otherwise (+/-) Fishing ground 3 Vungkhoi 1: off shore fi shing; 0: otherwise (+/-) Marine product consumption market ThitruongTT 1: sale to logistics support vessels on the spot; 0: otherwise (+/-) Education level of captains HocvanTT The highest school grade completed (+) Years of experience of captains KinhnghiemTT The number of years (+/-) Seine fi shing Luoivay 1: yes ; 0: otherwise Gillnetting Luoire 1: yes ; 0: otherwise The Determinants of Fishing Households’ Income 15 “Demographics and socio- economic characteristics” variables Number of household members Nhankhau The number of people (+/-) Number of dependent household members Phuthuoc The number of people (-) Age of fi shermen Tuoi Age (+) Education level of the head of household HocvanND The highest school grade completed (+) Years of fi sheries experience KinhnghiemND The number of years (+) Love for profession Yeunghe 5-point Likert scale with: (1) do not love the job and (5) love the job very much (+) Ownership of the fi shing vessels Chutau 1: Owner; 0: Crew member (+) Total number of fi shermen of the household LaodongNN The number of fi shermen (+) Income diversifi cation status of households DadanghoaTN 1: having income from non-fi sheries activities; 0: having income from fi sheries only (+/-) “Fisheries extension” variables Fisheries extension: Measured by 3 observation variables: The role of local fi shery extension workers, the role of extension work, the role of local fi sheries associations Khuyenngu Likert scale with 5 levels: (1) not good and (5) very good; Cronbach’s alpha testing is used to test the scale. (+) Participation in cooperative groups or/and associations Hoptac 1: participating; 0: not participating (+) Fuel support HotroNL 1: receiving fuel support; 0: not receiving fuel support (+) Social Sciences Information Review, Vol.12, No.4, December, 201816 3. Methodology, procedure and estimation results First, we tested the variance infl ation factors (VIF) according to Kennedy (2008) to test the multi-collinearity between independent variables of the estimation models. The test result shows that multi- collinearity between the explanatory variables do not exist in the model. Then, we continued to Breusch-Pagan/Cook- Weisberg test (Greene, 2000) to test Heteroscedasticity. The results of the tests presented in Table 2 show that the models violate the heteroscedasticity assumption, which allows us to estimate using the ordinary least squares method (OLS) with heteroscedasticity adjustment in the model. The regression results by the OLS method are presented in Table 2 which estimates the determinants of the income of fi shing households in coastal plain areas of Quang Nam province as follows: Table 2: Estimation results of factors aff ecting the income of fi shing households in coastal barrier island areas of Quang Nam province(*) Models (1) (2) (3) (4) Variables LnTongTN LnTongTN LnTNBQ LnTNBQ LnCongsuat 0.114*** 0.117*** 0.119*** 0.122*** (0.003) (0.003) (0.005) (0.004) Congnghe 0.0397 0.0469 0.0433 0.0509 (0.362) (0.295) (0.352) (0.286) Luoivay -0.0828 -0.131* -0.0955 -0.145* (0.262) (0.078) (0.223) (0.066) Luoire 0.200 0.228 0.158 0.187 (0.261) (0.209) (0.417) (0.341) Chupmuc -0.287*** -0.295*** -0.301*** -0.307*** (0.006) (0.006) (0.009) (0.009) Vungkhoi 0.0478 0.0259 0.0478 0.0227 (0.588) (0.771) (0.604) (0.807) Venbo -0.288*** -0.311*** -0.261** -0.285** (0.006) (0.003) (0.023) (0.014) HocvanTT -0.00560 -0.00530 -0.00677 -0.00617 (0.763) (0.777) (0.744) (0.770) KinhnghiemTT -0.00150 -0.00158 0.000445 0.000410 (0.707) (0.691) (0.915) (0.921) ThitruongTT 0.290*** 0.277*** 0.332*** 0.318*** (0.005) (0.009) (0.002) (0.006) 0.0619 0.0496 0.207*** 0.196*** (0.417) (0.519) (0.002) (0.003) Nhankhau 0.209*** 0.212*** (0.000) (0.000) HocvanND 0.0141 0.0122 0.0262 0.0240 (0.438) (0.517) (0.181) (0.240) (*) Pvalue is noted in parentheses. * pvalue < 0.1, ** pvalue < 0.05, *** pvalue < 0.01. The Determinants of Fishing Households’ Income 17 Tuoi -0.00877** -0.00827* -0.00517 -0.00455 (0.050) (0.068) (0.280) (0.354) Phuthuoc -0.176*** -0.183*** -0.0205 -0.0257 (0.001) (0.000) (0.347) (0.251) LaodongNN 0.123 0.132* 0.211*** 0.222*** (0.113) (0.098) (0.004) (0.003) KinhnghiemND 0.00902* 0.00747 0.00852 0.00675 (0.071) (0.148) (0.115) (0.219) Chutau 0.559*** 0.594*** 0.524*** 0.561*** (0.000) (0.000) (0.000) (0.000) Yeunghe 0.122*** 0.133*** 0.155*** 0.167*** (0.001) (0.000) (0.000) (0.000) Khuyenngu 0.0235 0.0102 0.0418 0.0278 (0.552) (0.793) (0.316) (0.497) Hoptac 0.129* 0.118 0.147* 0.137* (0.079) (0.111) (0.067) (0.092) HotroNL 0.136 0.109 0.144 0.116 (0.220) (0.330) (0.214) (0.321) HoiAn 0.210 0.345*** 0.289** 0.427*** (0.105) (0.006) (0.025) (0.001) DuyXuyen -0.168* 0.0750 -0.200* 0.0424 (0.092) (0.390) (0.060) (0.658) DienBan 0.00664 0.214* 0.0859 0.291** (0.956) (0.078) (0.531) (0.039) ThangBinh -0.320*** -0.324*** (0.000) (0.000) NuiThanh 0.159* 0.149* (0.062) (0.083) Hằng số 2.879*** 2.657*** 2.820*** 2.593*** (0.000) (0.000) (0.000) (0.000) N 588 588 588 588 R2 0.508 0.492 0.429 0.413 Breusch-Pagan/ Cook-Weisberg Test (0.0846) (0.0256) (0.0258) (0.0092) - “Regions”: Estimates show that the average income of fi shing households in coastal plain areas in Nui Thanh district and Hoi An city is statistically signifi cantly higher than the average income of fi shing households in the remaining districts. This aligns with the fact that Nui Thanh district and Hoi An city have large fi shing ports adjoining the estuary and large fl eets of fi shing vessels operating mainly in nearshore and off shore areas, especially in Tam Hai island commune and Cua Dai commune which have large off shore fl eets and long experience in off shore fi shing. In contrast, the average income of fi sheries households in the coastal plain areas of Thang Binh district is statistically signifi cantly lower Social Sciences Information Review, Vol.12, No.4, December, 201818 (at the signifi cance level of 1%) than the average income of fi shing households in the remaining districts. This is in line with the fi eld visit observation that most fi shermen in coastal plain areas of Thang Binh district practice fi sheries in inshore areas in small boats with capacity of less than 24CV. Therefore, the income from fi sheries is usually low. - Characteristics of fi sheries The coeffi cient of vessel capacity variable is positive, as expected, and is statistically signifi cant at 1%. This shows that the capacity of fi shing vessels has a signifi cant impact on the income of fi shing households, whereby fi shermen on large vessels with high capacity will have high income. The fi shing grounds of fi shermen are divided into three types: off shore, nearshore, and inshore. Estimates show that fi shing households engaged in inshore fi shing have signifi cantly lower income compared to off shore and nearshore fi shing at 1% signifi cance level. In contrast, the average income of fi shing households engaged in off shore fi shing do not diff er signifi cantly from those of nearshore and inshore fi shing. Therefore, the eff ectiveness of off shore fi shing of the fi shermen in coastal plain areas of Quang Nam province is rather low due to the limited experience in off shore fi shing. Thus, facilitating the shift from inshore fi shing to off shore fi shing with the appropriate scale should be identifi ed as a focus in the coming time to improve the income of fi shing households towards sustainability. Unexpectedly, the coeffi cients of fi shery equipment and technology level variables do not reach a statistical signifi cance level of 10%. This means that there is little diff erence in the level of fi shing technology employed by the fi shermen in the coastal plain areas of Quang Nam province. Most of the fi shing households rely on experience rather than modern fi shing technology. In practice, the use of ordinary, obsolete fi shfi nders can result in low net fi shing productivity, which makes the income from this mode of fi shing lower than other modes. This is further demonstrated by the negative coeffi cients of the dummy variables of seine fi shing, which shows that the income of seine fi shing households is statistically signifi cantly lower than that of households employing other fi shing methods. This is a fact to be noted in the implementation of fi sheries modernization policy for coastal plain areas in the coming time. Estimation results also show that the consumption market for marine catch has a signifi cant impact on the average income of fi shing households. Accordingly, fi shing households selling marine catch to purchasing logistics vessels on the spot will have a signifi cantly higher income compared to those selling to markets on land. The policy implication is that Quang Nam province needs to put mechanisms in place to develop a logistics service fl eet to improve the effi ciency of fi shing activities, especially off shore fi shing. Thus, characteristics of fi sheries have a decisive impact on the income of fi shing households in coastal plain areas in Quang Nam province. In other words, there is very high level of dependence on fi sheries for income generation of this community. - Demographics and socio-economic characteristics Estimates show that the number of household members have a positive eff ect on the income of fi shing households at The Determinants of Fishing Households’ Income 19 a statistical signifi cance level of 1%. Similarly, the number of fi shery workers in the household also has a positive eff ect on the household income. That still holds true at a signifi cant level of 1% for models (3) and (4) by eliminating the eff ect of demographic variables in the model. In contrast, as expected, the coeffi cient of the variable of dependent members (members not generating income) is negative and that still holds true at a statistically signifi cant level of 1% in both (3) and (4) models. This means that the number of dependent members has a negative impact on the income level of fi shing households. In particular, as expected, income diversifi cation has an eff ect on household income growth at a statistical signifi cance level of 1% in both (3) and (4) models. The policy implication is that raising the income of fi shing households from non-fi shery activities is the direction to be encouraged in the future. Estimated results also show that the age of fi shermen correlated negatively with household income at 10% statistically signifi cant level in model (1) and 5% in model (2). Thus, the higher the age of the household head, the lower the household income. This is in line with the fact that the inshore fi shermen in the coastal plain areas are mostly elderly people. Young and middle-aged people are gradually taking the key role in improving fi shing effi ciency for the community through the development of nearshore and off shore fi shing fl eets. Unexpectedly, the education level of household heads and the education level of captains do not have a statistically signifi cant eff ect on household income. This allows us to replace the education level of household heads variable with the captains’ educational level variable. Meanwhile, experience in fi sheries has a signifi cant eff ect on household income at 10% signifi cant level in model (1). It is implied that the income of fi shing households in the coastal plain areas is not heavily infl uenced by experience. This is an especially noteworthy point that needs to be considered thoroughly in formulating policy to increase community income by encouraging young fi shermen to engage in off shore fi shing. Particularly, fi shermen’s love of profession has a positive eff ect on household income at the statistically signifi cant level of 1%. The implication is that love of profession is an important driving force in improving the effi ciency of fi shing activities, contributing signifi cantly to the increase in fi sheries- derived income of fi shing households. - Fisheries Extension According to the estimation results, the role of fi sheries extension do not have signifi cant eff ect on the income of fi shing households. This can be understood that fi sheries extension in the local area has not really contributed to improving the effi ciency of fi sheries activities, or possibly that fi shermen still mostly rely on experience without fully realising the role of fi sheries extension in marine product exploitation and preservation. Similarly, the fuel support variable also has no signifi cant eff ect on the income diff erence between supported and non-supported fi shing households. This is consistent with the fact that the majority of local fi shing vessels operate in nearshore fi shing grounds which are not eligible for fuel support. As expected, the variable of participation in cooperative group has a positive impact on household income at Social Sciences Information Review, Vol.12, No.4, December, 201820 10% signifi cant level in models (1), (2) and (4). This implies that participation in fi shery cooperative groups or associations actually helps fi shing households improve their production effi ciency by sharing fi shing grounds, minimising fuel costs, cooperating in fi shing, This suggests that the local government should quickly ensure the substantive functioning of fi sheries associations with the nuclear unit being cooperative groups in order to enhance fi shing effi ciency, contributing to improving income for fi shing community in coastal plain areas. 4. Policy recommendations Based on the above analysis, some policy recommendations are proposed to improve the income of fi shing communities in coastal plain areas of Quang Nam province in the coming time as follows: Firstly, to further promote the reasonable shift from inshore fi shing to nearshore and off shore fi shing in fi sheries communities in coastal plain areas of Quang Nam province. This can help raising incomes for fi shermen, minimising the depletion of resources in coastal areas, and contribute to protecting the national maritime sovereignty. In addition, the policy of shifting to off shore fi shing for the communities in these areas should be designed in a way that is specialised, suitable for each fi shing mode and fi sheries community. Accordingly, Quang Nam province should focus on developing off shore fl eets for fi shing communities with long-standing tradition and practical experiences in off shore fi shing, which are the areas with large fi shing ports close to estuaries and smooth waterways like Hoi An city and Nui Thanh district. For other coastal plain areas, where fi shing communities have long been accustomed to inshore fi shing practice (Tam Ky, Thang Binh, Duy Xuyen), the provincial authority should put specifi c policies in place to encourage fi shermen to gradually engage in nearshore and off shore fi shing with medium-size vessels, avoiding the development of large fl eets with high capacity vessels to operate in far fi shing grounds given the limited experience of the community in off shore fi shing. In addition, it is necessary to rapidly reform administrative procedures to enable eligible fi shermen to easily access credit from central government programs (Decree 67) and funding support from the local government (Development Investment Fund, Fisheries Assistance Fund,...). Secondly, to promote the modernisation of marine product exploitation and preservation technologies for off shore fi shing fl eets in order to increase the role of technology in improving the effi ciency of fi sheries. In particular, attention should be paid to promoting the leading role of local authorities in connecting fi shermen and enterprises in the supply of modern machinery, equipment and technologies for marine product exploitation and preservation. The role of fi sheries extension work in disseminating information and encouraging fi shermen to adopt advanced, modern fi shing and preservation equipment and technologies should be enhanced. Thirdly, income diversifi cation is an important strategy in improving income for fi sheries communities in the coastal plain areas. Accordingly, it is necessary to review and adjust policies to support The Determinants of Fishing Households’ Income 21 fi shermen to reduce poverty and increase income based on the combination of fi shery and non-fi shery livelihoods. Particularly, it is necessary to focus on raising non-fi shery income for fi sheries communities on the basis of exploiting the great potentials of the coastal plain areas of Quang Nam province for industrial and tourism development; there should be mechanisms to encourage enterprises to employ local workers, especially female workers in the fi shing community. Fourthly, to focus on eff ective implementation of family planning policy in the fi shing community. Communication policy should focus on the dissemination of knowledge on family planning to young fi shing households with low education levels, poor households and households replasing into poverty, thereby reducing the number of dependent members in fi shing households. In addition, emphasis should be given to education development among fi shing community. Fifthly, to develop training activities to improve the capacity for captains, chief engineers of fi shing vessels operating in nearshore and off shore areas, especially to grasp and competently use modern, advanced technology and equipment. In particular, incentive programs should be designed to encourage young, educated and capable fi shermen to participate in building and mastering the operation of off shore fi shing vessels. Sixthly, to continue to establish and develop commune-level, district-level fi sheries associations in coastal areas whose nuclear units are cooperative groups. In particular, it is necessary to quickly institutionalise the legal status of fi sheries associations so that these associations have the legal entity as the representative body for fi shermen recognised by law and therefore are capable of representing fi shermen in matters related to fi sheries  References 1. D. Garoma, A. Admassie, G. Ayele & F. Beyene (2013), “Analysis of determinants of gross margin income generated through fi shing activity to rural households around Lake Ziway and Langano in Ethiopia”, Agricultural Sciences, No. 4, Vol. 11, pp. 595. 2. W.H. Greene (2000), Econometrics Analysis, Chapter 14, Prentice Hall, Upper Saddle River. 3. Hoang Hong Hiep (2016), “Factors aff ecting the income of off shore fi shing households in the Southern Central Coast”, Journal of Economic Research), Issue 10, pp. 47-53. 4. O.M.A.R. Al Jabri, R. Collins, X. Sun, A. Omezzine, R. Belwal (2013), “Determinants of Small-scale Fishermen’s Income on Oman’s Batinah Coast”, Marine Fisheries Review, Vol. 75, No. 3, pp. 21-32. 5. P. Kennedy (2008), A guide to econometrics, 6th edition, Wiley- Blackwell, Cambridge. 6. E. Olale & S. Henson (2013), “The impact of income diversifi cation among fi shing communities in Western Kenya”, Food Policy, Vol. 43, pp. 90-99. 7. E. Olale & S. Henson (2012), “Determinants of income diversifi cation among fi shing communities in Western Kenya”, Fisheries Research, Vol. 125, pp. 235-242.