Economic-environmental trade-offs in marine aquaculture: The case of lobster farming in Vietnam

Marine aquaculture has increased in importance in most countries over recent decades. In order to develop this sector in a sustainable way, it is necessary to consider its environmental impacts. In Vietnam, marine cage lobster cultivation has been seen as a high return business. However, in recent years, the sector has been facing sustainability issues, with recurrent disease outbreaks and increased lobster mortality. These phenomena are linked to nutrient pollution, which is attributed to the overuse of feed inputs. The annual loss for the sector is reported to be up to 30 million USD. Local lobster farmers have reacted to these issues by spending more on antibiotics and chemicals, or by increasing efforts to clean cages. This behavior suggests that farmers perceive a conflict between reducing environmental pressure and improving the economic performance of the sector. In order to identify the relationship between cost and environmental efficiency, this paper uses a Material Balance Principle based Data Envelopment Analysis approach using a dataset of 353 marine cage lobster farms in Vietnam. The findings show that improvements in input use efficiency would result in both lower production costs and better environmental performance. If lobster farms were to become more cost efficient, using a more appropriate input mix, given the input price information, this would benefit the environment. Similarly, improving environmental performance generally also reduces production costs.