Aquaculture Economics & Management

ISSN: 1365-7305 (Print) 1551-8663 (Online) Journal homepage: http://www.tandfonline.com/loi/uaqm20

Technical Efficiency of Tank Culture Systems

in Peninsular Malaysia: An Application of Data
Envelopment Analysis

Abdullahi Iliyasu & Zainal Abidin Mohamed

To cite this article: Abdullahi Iliyasu & Zainal Abidin Mohamed (2015) Technical Efficiency of
Tank Culture Systems in Peninsular Malaysia: An Application of Data Envelopment Analysis,
Aquaculture Economics & Management, 19:4, 372-386, DOI: 10.1080/13657305.2015.1082118

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Published online: 27 Oct 2015.

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 Aquaculture Economics & Management, 19:372–386, 2015
Copyright © Taylor & Francis Group, LLC
ISSN: 1365-7305 print/1551-8663 online
DOI: 10.1080/13657305.2015.1082118

TECHNICAL EFFICIENCY OF TANK CULTURE SYSTEMS IN

PENINSULAR MALAYSIA: AN APPLICATION OF DATA
ENVELOPMENT ANALYSIS

Abdullahi Iliyasu and Zainal Abidin Mohamed

Department of Agribusiness and Information Systems, Faculty of Agriculture, Universiti
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Putra Malaysia, Serdang Selangor, Malaysia

& The demand for animal protein especially fish is growing rapidly perhaps due to rapid
expansion of population, increased incomes, and changes in eating habits and life styles of
consumers. Capture fisheries are currently overexploited and their yield has become stagnant over
the last decades and, in some cases, has even declined. Nevertheless, aquaculture has the
potential to meet these challenges if well practiced. The study therefore, aims to estimate
Technical Efficiency of tank culture systems using Data Envelopment Analysis (DEA).
Additionally, it also investigates the determinants of technical inefficiency by employing a
regression model. The estimated technical efficiency was 0.89, which means that the fish farmers
can reach full technical efficiency through reducing their input usage by another 11%. Results
indicate that farmer’s experience, educational level, extension training, job status, and water
management have positive and statistically significant impacts on technical efficiency.
Therefore, increase in any of these factors will have a direct impact on technical efficiency.

Keywords aquaculture, data envelopment analysis, inefficiency, Malaysia, slack

variables, technical efficiency

INTRODUCTION
Malaysia accounted for less than 1% of world aquaculture production
(FAO, 2012) despite its potential resources for fish farming (Yew et al.,
2007). Freshwater fish farming in the country involves different culture
systems that include ponds, cages, and tanks. However, pond culture sys-
tems dominate freshwater fish production. Although tank culture systems
are more recent (1993), they play an important role in freshwater aquacul-
ture both in terms of production and value. Total fish production from this

Address correspondence to Abdullahi Iliyasu, Department of Agribusiness and Information

Systems, Faculty of Agriculture, Universiti Putra Malaysia, Serdang Selangor 43400 UPM, Malaysia.
E-mail: manawaci@yahoo.co.uk
Color versions for one or more of the figures in the article can be found online at www.
tandfonline.com/uaqm.
 Technical Efficiency of Tank Culture Systems in Malaysia 373

subsector was a mere 408 metric tons and worth about USD 0.56 Million
(RM1.8 Million) in 1993. After two decades, this figure escalated to 4,847
metric tons (annual growth rate of 54%) with a value of about USD
13.75 Million (RM44.0 Million). In terms of employment, about 29,482
farmers were involved in Malaysian aquaculture, with 77% engaged in vari-
ous freshwater aquaculture systems. Pond culture was predominant, with
83% of fish farmers using ponds, 6% using cages, and another 6% using
tank culture systems (Annual Fisheries Statistics, 2012).
In spite of recent growth in tank fish farming, to our knowledge there is
no study in the literature that measures the technical efficiency of this
promising industry to guide planners and investors. Improving technical
efficiency of tank fish farming would increase productivity and enhance
revenue by decreasing production costs. Thus, measuring the technical
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efficiency and investigating those factors that are responsible for inef-
ficiency are important to provide guidance for developing tank fish farming
in Malaysia.

Efficiency Studies in Aquaculture

Several empirical studies have employed both SFA and DEA to measure
Technical Efficiency (TE) in aquaculture (Table 1). The estimated TE
scores are descriptive values that show the amount of output to be
expanded (output orientation) or the amount of inputs to be reduced
(input orientation) (Charnes, Cooper, & Rhodes, 1978). TE scores indicate
the presence of slack variables but do not indicate the reason(s) for the
inefficiency in the production process. Thus, the TE scores are usually
regressed against predetermined factors to investigate the source(s) of
inefficiency (Table 2).

MATERIALS AND METHODS

Tank Culture Systems of Peninsular Malaysia
Three states (Pahang Perak and Selangor) in Peninsular Malaysia were
selected purposively for this study based on: (1) highest concentration of
active tank fish farmers; and (2) production of a large share of fish in terms
of tank aquaculture. Fish production from the three states constituted
about 56% of the total output from tank culture systems in 2012. Catfish
and red tilapia are the main species cultured in tanks. The demand for
the latter species is high because of it color and flavor and attracts a better
price. Catfish has gained popularity in recent years especially among lower
income groups perhaps due to its relatively low price.
 374 A. Iliyasu and Z. A. Mohamed

TABLE 1 Summary of Efficiency Studies in Aquaculture

First Author Year Country Method Production technology TE

Arita & Leung 2014 Hawaii

DEA aquaculture farms1 0.73
DEA aquaculture farms3 0.46
DEA Catfish1 0.96
DEA Catfish3 0.52
DEA Foodfish1 0.56
DEA Crustacean2 0.36
DEA Crustacean3 0.37
DEA Ornamental1 0.85
DEA Mollusks and Others1 0.57
Asche and Roll 2013 Norway SFA Salmon 0.82
Begum et al. 2013 Bangladesh SFA Shrimp 0.82
Tsue et al. 2013 Nigeria SFA Catfish farms 0.82
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Alam et al. 2012 Bangladesh SFA Tilapia 0.78

Alam 2011 Bangladesh DEA Pangas Fish farms 0.86
Nielsen 2011 Denmark DEA Salmon 0.81
Tan et al. 2011 Philippines
Sampaloc lake SFA Tilapia 0.18
Palakpakin lake SFA Tilapia 0.28
Laurel lake SFA Tilapia 0.39
Agoncilla lake SFA Tilapia 0.46
Chang et al. 2010 Taiwan DEA SPUG4 0.55
DEA SPNUG5 0.52
DEA NSPUG6 0.40
DEA NSPNUG7 0.25
Onumah et al. 2010a Ghana SFA Fish farms 0.84
Onumah et al. 2010b Ghana SFA Fish farms 0.79
Kareem et al. 2009 Nigeria SFA Concrete ponds 0.88
SFA Earthen ponds 0.89
Singh et al. 2009 India SFA Fish farms 0.66
Alam & Murshed-e-Jahan 2008 Bangladesh SFA Prawn-carp 0.85
Roy & Jens 2008 India SFA Fish farms 0.73
Singh 2008 India SFA Fish farms Category I8 0.69
SFA Fish farms Category II9 0.65
Amos 2007 Nigeria SFA Crustacean farms 0.70
Den et al. 2007 Vietnam Prawn farming
SFA Intensive 0.71
SFA Extensive 0.47
Cinemre et al. 2006 Turkey DEA Trout farms 0.82
Kaliba & Engle 2006 USA DEA Catfish farms 0.73
Dey et al. 2005 China SFA Extensive/semi-intensive 0.77
SFA Intensive/semi-intensive 0.84
SFA Intensive 0.93
India SFA Intensive/semi-intensive 0.86
SFA Extensive 0.65
Thailand SFA Extensive 0.72
SFA Intensive/semi-intensive 0.91
Vietnam SFA Extensive 0.42
SFA Intensive/semi-intensive 0.48

(Continued)
 Technical Efficiency of Tank Culture Systems in Malaysia 375

TABLE 1 Continued

First Author Year Country Method Production technology TE

Kumar et al. 2004 India SFA Shrimp farms 0.69

Arjumanara et al. 2004 Bangladesh SFA CTR10 0.69
SFA TR11 0.86
SFA TCNR12 0.61
Chiang et al. 2004 Taiwan SFA Milkfish farms 0.82
Irz & Mckenzie 2003 Philippine SFA Freshwater fish farms 0.83
SFA Brackish water fish farms 0.54
Awoyemi et al. 2003 Nigeria SFA Fish farms 0.24
Sharma & Leung 2000 India SFA Carp 0.66
Sharma et al. 1999 China DEA Carp 0.83
Sharma 1999 Pakistan SFA Carp 0.56
Iinuma et al. 1999 Malaysia SFA Carp 0.24
Sharma & Leung 1998 Nepal SFA Carp 0.69
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Gunaratne & Leung 1997 Malaysia SFA Shrimp 0.78

DEA 0.80
Mean 0.66
1
1997, 22002, 32007.
4
Shellfish producer using groundwater; 5Shellfish producer not using groundwater.
6
Nonshellfish producer using groundwater; 7Nonshellfish producer not using groundwater.
8
Pond area
0.32 acre, 9Pond area > 0.32 acre.
10
Technical advice receiving farmers, 11Training receiving farmers, 12Normal farmers.

Data
The total number of farmers involved in tank fish farming in the three
selected states is generally low (346) when compared with other culture sys-
tems like ponds (1, 893) and cages (802). Three districts were purposively
selected from Perak and Selangor each with only one from Pahang based
on cluster sampling that identified clusters of active tank fish farmers in
these areas.
The data for this study were collected by questionnaire and by oral
interviews with the selected respondents. Information was collected on
their input usage in a single production season as well as outputs pro-
duced. In addition, relevant information on the farmer’s socioeconomic
features and farm-specific characteristics were also obtained. Initially, a
pilot study was conducted to validate the questionnaire and all the neces-
sary adjustments and changes were done. Subsequently, a total of 85
questionnaires were finally administered to the selected respondents,
but only 57 were used in the analysis due to incomplete responses by
some farmers.
Two-stage Data Envelopment Analysis (DEA) was employed by first
estimates technical efficiency scores and then regressing the estimated
technical efficiency scores against socioeconomics and farm-specific
variables. This procedure yields significantly better results than either
 376 A. Iliyasu and Z. A. Mohamed

TABLE 2 Impact of Farm-Specific Variables and Socioeconomic Factors on Technical Efficiency

First Author Year Country Method Farm Characteristics and Socioeconomic Factors

Asche 2013 Norway SFA Age(-)***; Disease(-)*; Insurance disbursement(-)*:

Lack of smolt(-)*; Salmon price(-)*
Begum 2013 Bangladesh SFA Age(þ)*; Education(þ)***; Non-farm-income(þ)
*;Distance(-)*;Family size(-);tenureship(þ);
Water qualityr(-);
Tsue 2013 Nigeria SFA Age(þ)**; Education(þ)* ;Experience(þ);
Household size(þ)***
Alam 2012 Bangladesh SFA Age(þ)*; Education(þ); Income(-)*;Culture
length(þ)**;Depth of pond(þ);Pond age(þ);
Water color(þ)
Alam 2011 Bangladesh DEA Age(-); Experience(-);Culture length(-);Fry size(-)*
Tan 2011 Philippines
Sampalok lake SFA Age(-);Education(-)**;Experience(-);Fry price(þ)*;
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Culture length(-)*;Farm size(-);Cage area(-);;

Mortality(-)**
Palakpakin SFA Age(þ);Education(þ);Experience(þ);Fry price(þ)
*;;Farm size(-);Cage area(-); Depth of cage(-);
Mortality(-)*
Laurel SFA Age(-);Education(-);Experience(þ);Fry price(þ);
Culture length (þ);Farm size(þ)**;Mortality(-)
**;
Agoncillo SFA Age(þ);Education(þ)**;Experience(þ);Fry price
(þ);Farm size(-)**;Depth of cage(þ); Mortality
(-)**
Onumah 2010a Ghana SFA Age(-)*;Education(-)**;Experience(-)*;;Gender(þ)
*;Pond type(þ)*;Extension services(þ)
**Occupation status(þ)*
Onumah 2010b Ghana SFA Age(-); Education(-);Experience(-)*;Gender(þ)*;
Pond type(þ)*;farm size(-)*
Kareem 2009 Nigeria
Earthen pond SFA Age(-); Education(þ); Experience(þ); Household
size (þ)
Concrate pond SFA Age (-); Education (þ); Experience (þ)*;
Household size (þ)
Singh 2009 India SFA Education(þ)*;Experience(-)**; Technical training
(þ); Source of fingerlings (þ)*
Roy 2008 India SFA Age (þ); Education (þ); Experience (-); Pond size
(þ)**; Water Source (þ)**; Period netting for
biomass (-)**
Amos 2007 Nigeria SFA Age (-)**; Education (-); Household size (þ)**
Cinemre 2006 Turkey DEA Education (þ); Experience (þ)**; Pond size (-)*;
Pond tenure (þ)**; Access to credit (þ)*;
Extension Services (þ)
Dey 2005 China
Extensive SFA Experience (þ); Farm Size (-); Distance from
market (-)
Semi-extensive SFA Experience (-); Farm Size (þ)*; Distance from
market (-)
Intensive SFA Experience (þ); Farm Size (þ)**; Distance from
market (þ)

(Continued)
 Technical Efficiency of Tank Culture Systems in Malaysia 377

TABLE 2 Continued

First Author Year Country Method Farm Characteristics and Socioeconomic Factors

India
Semi-extensive SFA Age (-); Education (þ); Farm Size (-); Tenure(þ);
Distance from market (-)
Extensive SFA Age (-); Education (þ)*; Farm Size (-)*; Tenure(þ)
*; Distance from market (-)
Chiang 2004 Taiwan SFA Education (-)*; Experience (-)**
Irz 2003 Philippines
Freshwater SFA Experience (þ); Farm size(-); pond quality(þ)*;
Number of Production cycle/year(þ)**
Brackish water SFA Experience (þ)*; Farm size(-); Manager’s visit(þ)*;
Number of Production cycle/year(þ)**
*significant at 1%, **significant at 5%, ***significant at 10%.
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single-stage or double-stage Stochastic Frontier Analysis (SFA) that

assume either Cobb–Douglas or translog functional forms (Banker &
Natarajan, 2008). Although most of the previous studies used Tobit
Regression Models (TRM) in the second stage (Alam, 2011; Cinemre
et al., 2006; Kaliba & Engle, 2006), McDonald (2009) argued that its
use is considered inappropriate in this situation. According to McDonald
(2009), technical efficiency (TE) scores are fraction data and not gener-
ated by a censoring process, and suggested the use of Ordinary Least
Square (OLS) regression model as the most appropriate technique. This
argument was supported by Banker and Natarajan (2008). They reported
that the use of OLS regression analysis in the second stage of DEA gives
better results than using TRM because it gives statistically consistent
estimators of the influence of contextual factors.

Slack-Based Measure of Technical Efficiency (SBMTE) in DEA

The radial approach (CRR, Charnes–Cooper–Rhodes model) does
not take slack variables into consideration when measuring efficiency
and led Charnes et al. (1985) to develop the DEA additive model. How-
ever, even though this approach uses slack variables to discriminate
efficiency and inefficiency, it failed to provide efficiency estimates to
measure performance of the decision-making unit. Tone (2001) pro-
posed a non-radial model (Slacks-Based Measure of Technical
Efficiency, SBMTE) in DEA that directly deals with slacks (excess inputs
and output shortage) in efficiency estimation. The merit of SBMTE lies
in its ability to estimate efficiency scores that are unit invariant, mono-
tone (Torgersen et al., 1996), and reference-set dependent (Banker,
Charnes, & Cooper, 1984), which implies that they are not influenced
 378 A. Iliyasu and Z. A. Mohamed

by outliers (extreme values). SBMTE was adopted for this study and was
expressed as follows:
P
1  ð1=m Þ m s  =x
min q ¼ Psi¼1 þi ik
1 þ ð1=s Þ r ¼1 sr =yrk
Xn
st : xrk ¼ xij kj þ si ; i ¼ 1; . . . . . . . . . ; m
j¼1
X
n
ð1Þ
yrk ¼ yrj kj þ srþ ; r ¼ 1; . . . . . . . . . . . . ; s
j¼1

kj  0; j ¼ 1; . . . . . . . . . . . . ::; n
si  0; i ¼ 1; . . . . . . . . . . . . ::; m
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srþ  0; r ¼ 1; . . . . . . . . . . . . ::; s

Where q denotes SBMTE of n DMUs associated with m inputs set

xij(m ¼ stocking density, feed, labor, costs of other relevant inputs)
and s output set yrj (s ¼ different type of fish products); kj is a nonnega-
tive vector that allows for the construction of production possibility set
for j DMU; n is the number of DMUs (j ¼ 1 …..n); m is the number of
inputs (I ¼ 1 …..m); s is the number of outputs (r ¼ 1 … .s);. si is defined
as input excess; siþ denotes output shortfalls, respectively. DMU is SBM-
efficient if q ¼ 1, implying no input excess (si ¼ 0) or output shortfall
(siþ ¼ 0) for all i and r.

Efficiency Effects Analysis

The second stage of the analysis followed Banker and Natarajan (2008).
The model can be expressed as follows:
X
n
SBMTE ¼ b0 ¼ bi zi þ d ð2Þ
i¼1

Where SBMTE denotes Slack-Based Measure of Technical Efficiency and

b’s denotes unknown parameters to be estimated. Z’s are the contextual
or socioeconomic variables defined in Table 3, and d is the error terms.

Definition of the Variables

In this study, one output and four inputs were used to measured tech-
nical efficiency. The output represents the quantity of fish produced by
farmers, measured in kilograms. Inputs included stocking density, feed,
 Technical Efficiency of Tank Culture Systems in Malaysia 379

TABLE 3 Description of the Variables in DEA, MPI, and OLS Models

Variables in the models Description Unit

Dependent variable
Output Total quantity of fish produced Kilogram
Independent variables
Stocking density Fingerlings stocked in the farm per production Number
cycle
Feed Total quantity of feed utilized per production cycle Kilogram
Labor Total number of family and hired labor used per Man-day
production cycle
Other costs Represents costs incurred of other inputs per Ringgit*
production cycle
Technical efficiency determinants
Age Represents age of fish farmer/manager Year
Experience Represents number of years the farmer/manager Year
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spent in fish farming

Educational level
Farm status
Job status
Extension services
Workshop attended
Distance feed supplier
Household size
Water management
Level of education of fish farmer/manager Level
Status of the fish farm and is dummy (1 ¼ owner, Dummy
and 0 ¼ otherwise)
Status of the fish farmer and is dummy Dummy
(1 ¼ full-time, and 0 ¼ otherwise)
Extension visits to fish farm in the last three years Dummy
(1 ¼ yes; otherwise)
Workshop attended in the last three years (1 ¼ yes; Dummy
otherwise)
Distance from the nearest seed supplier Kilometers
(kilometers)
Number of the fish farmer family Number
Total number of water management and monetary Likert-scale
practiced used

*1USD ¼ 3.2 Ringgit (Malaysian currency).

labor, and costs of other relevant inputs illustrated in Table 3. The stocking
density is measured as the number of juvenile fish stocked in tanks. The
feed variable measured the quantity of feed used, in kilograms. The labor
variable represented number of hours spent while working on farms,
measured in man-days.
Other costs included the sum of chemicals, repairs, fuel, telephone
calls, and other miscellaneous expenses. Asche & Roll (2013), in their study
of determinants of inefficiency in Norwegian salmon aquaculture, also used
fish produced as output whereas stocking density, feed, labor and capital
were used as inputs. In addition, Iinuma, Sharma, and Leung (1999) esti-
mated technical efficiency of carp pond culture in Peninsular Malaysia
using total production to represent output while feed, stocking density,
labor and other expenses were included as inputs.
Table 3 also includes variables used to investigate the determinants of
technical efficiency in tank fish farming. Farmer’s age and experience
may have positive or negative impacts on technical inefficiency. Older
 380 A. Iliyasu and Z. A. Mohamed

farmers are expected to have gained more experience over time and be
more efficient technically. On the other hand, older and more experi-
enced farmers may be less willing to adopt new and improved tech-
nology. New and younger farmers are more likely to adopt new and
improved technology, and be more technically efficient. Education was
expected to have a positive impact on technical efficiency, implying that
the higher the educational level the more technically inefficient the farm
would be.
Farm status is a dummy variable that indicates whether the farmer
owns or rents the farm. This variable is expected to have a positive
impact on technical efficiency, implying that farmers who owned the
farms are more technically efficient. Job status, also a dummy variable,
indicated whether the farmer is full-time or part-time, and was expected
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to have a direct influence on technical efficiency. The coefficient signs

of both extension services and workshops attended were expected to
be positive.
Farmers who have attended extension training or workshops should be
more likely to adopt new technology and hence be more technically
efficient. Water management is expected to have a positive influence on
technical efficiency since fish rely on its quality as well as quantity to survive.
Other variables such as adaptation of technology, farm size, climatic
changes, and credit availability would perhaps be of importance in deter-
mining their impact on technical efficiency, but the survey information
collected lacked data on these factors.

RESULTS AND DISCUSSIONS

Technical Efficiency Estimates
The majority (32%) of the tank fish farmers have technical efficiency
scores close to unity (Figure 1). Furthermore, 14%, 26% and 19% have
technical efficiency scores ranging from 80–85, 86–90, and 91–95, respect-
ively. Findings revealed that less than 10% of the tank fish farmers sampled
have technical efficiency scores less than 0.80. These results imply that
more than 90% of the sampled tank fish farmers are doing relatively well
in their farm management.
The minimum and maximum values of the estimated Technical
Efficiency (TE) scores are 0.71 and 1.00, respectively. The estimated
average TE score of tank fish farmers in the study area was 0.89, which is
above most of the TE values reported in various DEA efficiency studies.
The implication of this finding is that on average, the tank fish farmers
can maintain their current output levels using existing production tech-
nology by reducing their input usage by only 11%.
 Technical Efficiency of Tank Culture Systems in Malaysia 381
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FIGURE 1 Frequency distribution of technical efficiency in tank culture systems.

Slack Variables Analysis

Input targets refer to the total amount of input adjustment required for
inefficient DMU to operate on the production frontier. Therefore, an input
target is always less than the actual input for an inefficient farm. The differ-
ences between actual and target inputs are referred to as input slacks
(Ramanathan, 2003).
Results of the analysis of slack variables indicated that the tank
culture system has stocking density slacks of only about 6%. This
implies that tank fish farmers have knowledge on the required stock-
ing density of their farms. Tanks are mostly small in size, thereby
making it easier for fish farmers to provide close supervision. Hence,
stocking rate is not an obstacle in tank fish farming. Results showed
that farmers are over feeding their fish, by about 18%. Therefore, fish
farmers need to regulate their fish feeding habits to reduce pro-
duction costs and increase earnings. The majority of sampled fish
farmers operated at a small scale and they depend mainly on family
labor. The estimated slacks for labor were low (7%), indicating that
labor was utilized efficiently.
Other costs include operational costs such as rent, transportation,
maintenance of machinery, consultancy, fueling, electricity, internet,
phone calls, and miscellaneous expenses. Although not all operational cost
applied to all sample fish farms (because many farms had no machineries,
buildings, or trucks), the other costs slacks were estimated and found to be
relatively low (9%). This indicates that the tank fish farmers manage their
spending on operational costs well.
 382 A. Iliyasu and Z. A. Mohamed

Normality, Heteroscedasticity and Multicollinearity Tests

Kolmogorov–Smirnov, Shapiro–Wilk, Kurtosis, and Skewness tests
were performed to check if the data were normally distributed. We failed
to reject the null hypothesis, as both Kolmogorov–Smirnov (p-value
¼ 0.20) and Shapiro-Wilk (p-value ¼ 0.24) had significant values greater
than 0.05 and concluded that the residuals were approximately normally
distributed. A common rule of thumb for normality test using both
Kurtosis and Skewness is that the z-values should fall between −1.96 and
þ1.96, respectively.
Therefore, the residuals are assumed to be approximately normally dis-
tributed with a skewness of −0.148 (standard error ¼ 0.167) and kurtosis of
−0.387 (standard error ¼ 0.333). A visual inspection (Figure 2) also showed
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that the data were approximately normally distributed. Brauch-Pegan and

White’s test were employed to test the null hypothesis of the absence of het-
eroscedasticity. We failed to reject the null hypothesis (homoscedasticity)
and conclude absence of heteroscedasticity. A multicollinearity test was
conducted using Pearson correlation matrix, variance inflator factors
(VIF), and tolerance (1/VIF). All pairs of IVs had low correlation and
the VIF for each IV was less than two while the tolerance value for each
IV was greater than 0.2 (Table 4). Therefore, we concluded that multicol-
linearity was absent in the IVs. In conclusion, the data were well fitted for
OLS regression analysis.

FIGURE 2 Histogram showing normal distribution of data.

 Technical Efficiency of Tank Culture Systems in Malaysia 383

TABLE 4 Multicollinearity Test

z1 z2 z3 z4 z5 z6 z7 z8 z9 z10

z1 1
z2 0.415 1
z3 0.461 0.240 1
z4 0.085 0.085 0.030 1
z5 0.133 0.189 0.143 0.011 1
z6 0.111 0.169 0.221 0.153 0.388 1
z7 0.037 0.052 0.014 0.048 0.083 0.154 1
z8 0.097 0.031 0.134 0.054 0.109 0.119 0.025 1
z9 0.036 0.105 0.119 0.075 0.266 0.363 0.315 0.131 1
z10 0.124 0.121 0.282 0.027 0.240 0.318 0.251 0.116 0.414 1
VIF 1.490 1.430 1.400 1.390 1.380 1.310 1.270 1.220 1.070 1.050
1/VIF 0.672 0.702 0.714 0.719 0.725 0.765 0.784 0.822 0.932 0.954
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Determinants of Technical Efficiency

Results showed that experience, education, extension services, job sta-
tus, and water management were significant determinants of technical
efficiency in tank culture systems (Table 5). Experience had a positive
and significant impact on technical efficiency as reported by most previous
studies. Educational level was found to have a positive but weakly significant
impact on technical efficiency, which implied that those tank fish farmers
who are educated were more technically efficient. Extension services were
estimated to have a significant positive effect on technical efficiency. Tank
fish farmers who were educated and had the opportunity to receive training
from extension agents concerning their farming activities may have com-
prehended relevant information faster and adopted new or improved tech-
nology more easily.
Job status had a positive and significant impact on technical efficiency.
Full-time tank fish farmers were more technically efficient. Part-time tank

TABLE 5 Determinants of Technical Efficiency in Tank Fish Farming

Variables Coefficients Standard error t-value p-value

Age 0.027 0.022 1.00 0.323

Family size 1.37 1.234 1.11 0.272
Experience 0.69 0.299 2.31 0.022
Education 0.173 0.103 1.68 0.10
Extension services 0.919 0.437 2.10 0.041
Workshops attended 0.456 0.382 1.19 0.238
Distance feed supplier 0.001 0.007 0.09 0.927
Farm status 0.157 0.347 0.45 0.652
Job status 1.193 0.468 2.55 0.014
Water management 0.043 0.022 1.92 0.050
Constant 0.285 1.019 0.28 0.781
 384 A. Iliyasu and Z. A. Mohamed

fish farmers may spend much of their productive time in their primary
place of work, with little time left for managing their fish farms. Water man-
agement was used as a proxy to capture the impact of Good Management
Practices in Aquaculture (GMPA) on technical efficiency. The GMPA was
found to have a direct and significant influence on technical efficiency.

CONCLUSIONS AND POLICY IMPLICATIONS

Tank fish farmers operated close to the production frontier. All inputs
contained slacks, but overfeeding was the greatest (18%). Thus, fish farm-
ers need to carefully regulate fish feeding to reduce production costs and
subsequently increase turnover. Experience, educational level, contact with
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extension agents, job status and water management were found to have
positive and significant impacts on technical efficiency. Increases in any
of these factors may enhance production performance. Thus, young and
energetic fish farmers should endeavor to learn managerial techniques
from older and experienced farmers. Extension agents should continue
to disseminate research findings to tank fish farmers in order to be more
technically efficient.

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