Investigation of Welfare Impacts of Targeting Subsidies on Fishery Households in Fars Province

Pisciculture, especially in countries which are unable to develop their marine resources, is a desired to provide part of their food and protein needs. This study aims at investigating welfare impacts of energy subsidy removal on fish producers in Fars province. To achieve the objective, cross-sectional data obtained from fish producers of Fars Province in 2010 was used. Cost, input demand and production functions were estimated using the collected data. The findings showed that in Fars Province removing fuel subsidies is led to decreased demand for fuel and production as well as a reduction in producer's revenue. As a result of that, in Fars Province benefits from fish are reduced by0.16 percent. The results also showed that food is the most important input in the fish production.a10 percent increases in food consumption is expected to raise the fish production by 4.8 percent. On the other hand, a 50 percent increase in the energy price will reduce the energy consumption by 9.5 percent, and as a result of that, the production and the benefit will be reduced by 0.057% (0.036 tons) and 0.06%, respectively. Regarding the importance of food in production, it is suggested to focus on improving the food productivity.